TaxTMI 
TaxTMI 
2026 (6) TMI 452
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....above, the appellant was engaged in providing business consultancy services to its overseas holding company. For the period 2007-08 to 2012-13, the Appellant was exporting such services. However, credit of service tax paid on input services was not availed by the Appellant. While filing of its service tax return for the period October 2012 to March 2013, the Appellant availed credit of service tax amounting to Rs. 8,13,81,665/-, which pertained to input services received during the period 2007-08 to 2012-13. Such credit was availed in the months of January 2013 to March 2013. It may be noted that during the relevant period, there was no time limit for availment of credit. Further, for the quarter January 2013 to March 2013 (relevant period), the appellant exported services valued at Rs. 9,19,53,538/-. Considering that the credit remained unutilized, the appellant filed a refund claim1dated 19.11.2013 for refund of unutilized credit in terms of Rule 5 of the Credit Rules read with Notification No. 27/2012-CE(NT) dated 18.06.2012 Since the total turnover of the appellant pertained only to export of services, the entire credit was admissible as refund, as reflected below: S. No . ....
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.... credit pertaining to the period 2007-08 to 2012-13. b. Refund has been filed for CENVAT Credit for the period 2007-08 to 201112 against exports for the period January 2013 to March 2013, and not against exports made during 2007-08 to 2011-12. There is a time limit of one year for filing refund claim under Section 11B of the Central Excise Act, 1944. c. Cenvat credit for which refund claim is filed is 'expensed out' during 200708 to 2011-12 in financial statements and has been recovered by raising invoices on Overseas company on cost plus markup basis which is equal to 115% of all costs and expenses. Hence, the tax paid on input services has already been recovered on outward supplies and sanction of such refund would give dual benefit to the Appellant. d. There is no treatment of Cenvat in books of accounts during 2007-08 to 2011-12. The said show cause notice was adjudicated vide Order-in-Original No. 01/2021-22 dated 14.06.2021, the refund was rejected basis findings which were identical to the findings in OIO dated 24.01.2019. Against the Adjudication Order, the appellant filed appeal before the Learned Commissioner (Appeals) which was decided vide ....
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....ducts cleared during the relevant period and exported without payment of Central Excise duty under bond or letter of undertaking; (D) "Export turnover of services" means the value of the export service calculated in the following manner, namely:- Export turnover of services = payments received during the relevant period for export services + export services whose provision has been completed for which payment had been received in advance in any period prior to the relevant period - advances received for export services for which the provision of service has not been completed during the relevant period; (E) "Total turnover" means sum total of the value of - (a) all excisable goods cleared during the relevant period including exempted goods, dutiable goods and excisable goods exported; (b) export turnover of services determined in terms of clause (D) of sub-rule (1) above and the value of all other services, during the relevant period; and (c) all inputs removed as such under sub-rule (5) of rule 3 against an invoice, during the period for which the claim is filed. ... Explanation 1.- For the purposes of this ru....
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....ce is placed on the following cases wherein the courts held that refund under Rule 5 does not require no one-to-one corelation between input services and export of services: * Microsoft Global Services Centre (India) Private Limited Vs Commissioner Of Customs, Central Excise & Service Tax, Hyderabad-IV 2020-VIL-440-CESTAT-HYD-ST * Tech Mahindra Ltd. Versus Commissioner of CGST & Central Excise, Mumbai West, Final Order No. 85335-85343/2026- CESTAT Mumbai, dated 19.02.2020 In addition to the above, following cases also held that refund of Cenvat credit pertaining to past periods can be claimed in the subsequent period as the same pertained to input services used towards exports: * Philco Exports Versus Commissioner Of C. Ex., New Delhi 2009 (234) E.L.T. 568 (Tri. - Del.) * Amdocs Business Services Pvt. Ltd. Versus Commissioner Of C. Ex., Pune2013 (31) S.T.R. 249 (Tri. - Mumbai) * CCE, Ludhiana Versus Vardhman Spg. & General Mills2017 (9) TMI 859 - CESTAT Chandigarh Final Order No. 61462/2017 dated 27.02.2017 * Commissioner of CGST & Central Excise, Chennai South Commissionerate Versus Flextronics Technologies (India) Private L....
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....hich the Appellant was entitled to receive. 4. Learned counsel further submitted that the appellant is entitled to receive the interest on delayed refund of the Cenvat credit availed on input services procured for export of services under Rule 5 of the Credit Rules in terms of Section 11BB of the Act. He relied upon the following decisions:- * Ranbaxy Laboratories Ltd. Versus Union Of India and Ors [2011] 33 STT 326 (SC) * M/s. Fabrimax Engineering Pvt. Ltd. Versus Commissioner of Central Excise, Nagpur2022 (379) E.L.T. 604 (Bom.) * M/s Microsoft Corporation (India) Pvt. Ltd. (Microsot) Versus The Commissioner of Service Tax, Delhi, The Commissioner of Central Excise and Service Tax, Gurgaon-I (Vice Versa) Final Order Nos. 60214-60217/2024 dated 03.05.2024 - CESTAT Chandigarh * Commissioner Of Central Tax, Bengaluru Versus Netapp India Pvt. Ltd.2020 (32) G.S.T.L. 176 (Kar.) In light of the above, since the Appellant is entitled for the refund claim, same shall be granted to the Appellant with interest as the same was not granted within 3 months from the date of receipt of the refund application under Section 11B of the Act. OTHER SUBMISS....
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....s per terms of agreement. Cost excludes expenses incurred for local taxes, extra-ordinary expenses and other expenses incurred by the Company for generation of revenue. Thus, the allegation of the department that Cenvat credit was expensed and taxes were recovered from the Overseas Company is merely based on assumptions and without considering the correct facts. The refund, therefore, is not barred on the grounds of unjust enrichment. Further, in any case, the test of unjust enrichment does not apply to cases involving refund of credit, as is apparent from Section 11B(2)(c) of the Act. It is further submitted that CENVAT credit was availed in the ST-3 returns filed by the Appellant for the period October 2012 to March 2013. While determining the refund application, the Relevant OIO had observed that some services did not qualify as input services in terms of Rule 2(l) of the Credit Rules. Further, the Appellate Authority has rejected the appeal without going into the issue of admissibility of credit. It is submitted that the test of admissibility of credit cannot be raised at the stage of refund proceedings. Admissibility of credit can be question only by way of indepen....
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....arch 2013, and the refund application was filed on 19.11.2013. Hence, the refund claim was filed within 1 year from the date of export of services and thus, in compliance of Section 11B of the Act. 6. On the other hand, learned Authorized Representative for the Revenue submitted that during the period October 2012 to March 2013, the appellant availed credit of service tax in their ST-3 returns amounting to Rs. 8,13,81,665/-, which pertained to input services received during the period 2007-08 to 2012-13. Such credit was availed in the months of January 2013 to March 2013. Considering that the credit remained unutilized, the appellant filed a refund claim dated 19.11.2013 for refund of unutilized credit in terms of Rule 5 of the Credit Rules read with Notification No. 27/2012-CE(NT) dated 18.06.2012. It is further submitted that it has been observed by the adjudicating authority that out of the total credit of Rs. 8,13,81,665, Cenvat credit of Rs.7,73,32,318 pertained to the input services received during the period 2007-08 to 2012-13 (till December 2012), which is not used for export of output services made by the appellant during the impugned period January 2013 to March 2013. ....
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....observed as under:- "9. On careful examination of various notifications (supra) issued by the Central Government, it reveals that based on the prescribed formula, the refund application has to be filled by the appellant and to be processed by the jurisdictional service tax authorities for sanction of refund of un-utilised Cenvat credit, owing to the reason of exportation of output service. No other mode or method has been prescribed in the statute for consideration of the refund benefit. In the case in hand (Appeal No. ST/22056/2014), the learned Commissioner (Appeals) has recorded the submissions of the appellant that the adjudicating authority has not applied the formula correctly for determination of eligible refund amount. However, without consideration of such submissions of the appellant, he has held that the original authority had taken into consideration the admissible credit, which appears justifiable. Since, the specific issue regarding adoption of the formula prescribed under Rule 5 ibid has not been discussed by the authorities below, we are of the considered view that the matter should be remanded to the original authority for a fresh finding on the issue, whe....
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....ould have exercised the option in acceptable. We find that the department itself has allowed this benefit for some months. 7.2 The processing of claims of refund from the cenvat account is one thing and demand of duty on the scrap is entirely a different thing. Therefore, the demand of duty should have been raised separately after following the procedure prescribed. The show cause notices have been issued on 18-9-2003, 29-9-2003, 3-10-2003, 7-1-2003, 9-10-2003 and 9-10-2003. The demand relates to the period from April 2002 to November 2002. The appellant have furnished the relevant dated 22-10-2002. Therefore, the demand should be restricted to the normal period mal period of limitation. 7.3 We find that the appellant claimed refund of amount lying in cenvat credit, and reduced amount was sanctioned. We agree with the Id. DR that whatever amount was not sanctioned continued to lie in their cenvat account. It was not a case of adjustment of any dues from the refund sanctioned. The question adjusting amounts which are not confirmed demands does not arise. Then there was no need to issue notices proposing demand of duties and issue of speaking orders. The decision of....
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....l in the case of Vardhman Spg. & General Mills (supra) wherein this Tribunal observed as under:- "6. We find that the contention of the Revenue is that there is no one to one correlation between the inputs and exported manufactured yarn to prove that the Cenvat credit relates to relevant quarter to which refund claimed pertained. In this regard, we find that the CBEC had issued a clarification vide Circular No.120/01/2010-ST dt. 19.1.2010 to simplify the procedure between output and inputs on the line Notification No. 17/2009-ST. We also note that the aforesaid circular also waived the requirement of allowing refund of Cenvat credit in the particular quarter only. In this regard, para 3.3 of the circular reproduced below is quite relevant: "3.3 Quarterly refund claims (para 2(d) above): As regards the quarterly filing of refund claims and its applicability, since no bar is provided in the notification, there should not be any objection in allowing refund of credit of the past period in subsequent quarters. It is possible that during certain quarters, there may not be any exports and therefore the exporter does not file any claim. However, he receives inpu....