2023 (6) TMI 11

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....o Media Solutions Private Limited"], the appellants herein, have filed these eight appeals against the Order-in-Appeal Nos. 124 & 125/2016 dated 22.02.2016 passed by the Commissioner of Service Tax (Appeals-I), Chennai and also Order-in-Appeal Nos. 15 to 20/2017 (STA-II) dated 20.02.2017 passed by the Commissioner of Service Tax (Appeals-II), Chennai, regarding the partial sanction / partial rejection of their refund claims by the refund sanctioning authorities. 2. As all these appeals involve an identical issue regarding interpretation of time-bar under Section 11B of the Central Excise Act, 1944, they are taken up together for disposal by this common order. 3.1 Brief facts of the case are that the appellant, who were registered under Service Tax, are providing services under the category of 'advertising agency service' and 'business auxiliary service'. The appellants have been exporting the said services to various clients located outside India and so, have been claiming refund of unutilized input service tax credit under Rule 5 of the CENVAT Credit Rules, 2004. 3.2 The appellants have filed refund claim for the quarter April 2012 to June 2012 on 27.03.2013 for sanction ....

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..... In all these six claims, the refund sanctioning authority has considered the decision of the Commissioner (Appeals) in Order-in-Appeal Nos. 184-190/2016 (STA-I) dated 23.03.2016 and also the provisions of the amending Notification No. 14/2016-C.E.(N.T.) dated 01.03.2016 to Notification No. 27/2012-C.E.(N.T.) dated 18.06.2012. However, the Department has filed appeals against these sanction of refunds on the plea that the amendment made vide Notification No. 14/2016-C.E.(N.T.) will be prospective and would not have retrospective effect and as certain invoices were time-barred considering the dates of the export invoices, these were required to be excluded in computation of the export turnover. The lower appellate authority has allowed the appeals filed by the Department vide Order-in-Appeal Nos. 15 to 20/2017 (STA-II) dated 20.02.2017, as per the details given below: - CESTAT Appeal No. Period Refund claim date Refund Amt. (in Rs.) OIO No.& dt. Amount Sanc- tioned (in Rs.) Amount Reje- cted (in Rs.) Reje- ction acce- pted by Ad2pro Rejection amount admitted ST/ 41101/ 2017 July 20....

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....ection 11B of the Central Excise Act, 1944, the relevant date from which one year time period for filing a refund claim of CENVAT Credit in case of export of services shall be calculated is the date of receipt of consideration i.e., the date of Foreign Inward Remittance Certificate (FIRC), as the export of service is said to be complete only on the date when the consideration is received in foreign exchange. It is further submitted that as the refund claims are filed on a quarterly basis, the end of the quarter in which the FIRC is received shall be the relevant date. 5.2 The Learned Advocate has placed reliance on the following decisions: - (i) Miramed Ajuba Solutions Pvt. Ltd. v. Commissioner of Service Tax-III, Chennai [2023 (4) TMI 214 - CESTAT, Chennai] (ii) Commissioner of Service Tax, Goa v. Ratio Pharma India Pvt. Ltd. [2015 (39) S.T.R. 31 (Tri. - LB)] (iii) Infosys BPO Ltd. v. Commissioner of Central Excise & Service Tax, Bangalore, Service Tax-I [2022 (4) TMI 306 - CESTAT, Bangalore] 5.3.1 The attention of the Bench has also been drawn to the Order of the Commissioner (Appeals) in their own case in Order-in-Appeal Nos. 534-536/2016 dated 0....

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....ion No. 27/2012-C.E.(N.T.) dated 18.06.2012 is the date of the export invoice or the date of receipt of consideration in convertible foreign currency i.e., the date of FIRCs, and consequently, whether the value of export for which invoices have been raised prior to the period of one year but in respect of which consideration has been realized during the relevant quarter within the period of one year, can be added to the export turnover for computation of the eligible refund under Rule 5 of the CENVAT Credit Rules, 2004? 9.1 On study of various decisions of the judicial authorities including the co-ordinate Benches of the Tribunal, we find that Section 11B of the Central Excise Act, 1944 has been drafted to prescribe a procedure for claiming of refund of Central Excise Duty under various circumstances within one year from the relevant date. The 'relevant date' has been defined in the explanation to this Section for various purposes. As far as the export of services is concerned, no relevant date was prescribed in this Section because this was meant for refund of duty of excise and not for export of services. Since the Notification No. 27/2012-C.E.(N.T.) dated 18.06.2012 required ....

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....ning the date of export invoice as the relevant date, rejected these refund claims as time barred. 10. We find that there is no ground that Section 11B mandates that the date of invoice must be considered as the relevant date. The residual category under Section 11B is the date of payment of duty. In case of export of services, as in these appeals, there is no payment of duty. As such, in various cases, the Tribunal has considered as to what constitutes an export of service under the Export of Service Rules and concluded that the date of realization of foreign exchange is the relevant date. If the export is not complete, the exporter of services is not entitled to claim refund under Rule 5 of the CENVAT Credit Rules, 2004. Therefore, harmoniously reading the Export of Service Rules and Section 11B of Central Excise Act, 1944, the Tribunal has taken a view that in case of export of services, the relevant date must be the date of realization of foreign exchange. For this reason only, an amending Notification No. 14/2016-C.E.(N.T.) dated 01.03.2016 was issued to remove the lacuna in the initial Notification No.27/2012-C.E.(N.T.) dated 18.06.2012. 11. We find that the above issue....

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....ataka High Court in the case of mPortal (supra) that Section 11B will have no application with respect to refund under Rule 5 of CCR. 11. The definition of relevant date in Section 11B does not specifically cover the case of export of services. Hence, it is necessary to interpret the provisions constructively so as to give its meaning such that the objective of the provisions; i.e. to grant refund of unutilized Cenvat credit, is facilitated. By reference to the Service Tax Rules, 1994 as well as the successor provisions i.e. the Export of Services Rules, 2005, we note that export of services is completed only with receipt of the consideration in foreign exchange. Consequently, the date of Foreign Inward Remittance Certificate (FIRC) is definitely relevant. The Hon'ble Andhra Pradesh High Court has held that the date of receipt of consideration may be taken as relevant date in the case of Hyundai Motors [2015 (39) S.T.R. 984 (A.P.)]. 12. The related question for consideration is whether the time limit is to be restricted to the date of FIRC or can be considered from the end of the quarter. The Tribunal in the case of Sitel India Ltd. (supra), has observed that the ....