By TIOL News Service

MUMBAI, NOVEMBER 29, 2014: THE respondents are a 100% EOU providing ‘Scientific and Technical Consultancy Service'. The entire services are exported. They filed refund claim on 15.4.2009 under the provisions of Rule 5 of CCR, 2004 r/w Notf. 5/2006-CE(NT).

The lower authorities allowed the refund and, therefore, the Revenue is in appeal before the CESTAT contending that as per Explanation B(a) to Section 11B, the limiting period of one year for sanction of refund is to be taken from the date of shipment of the goods which are exported. Whereas the interpretation of the lower authority is that the period of one year would start from the quarter of the month to which the refund claim pertains as the refund claims under Notification No. 5/2006-CE(NT) are to be submitted not more than once for any quarter in a calendar year. According to Commissioner (Appeals), the refund is for credit accumulated and not for the duty paid on the services exported and, therefore, the claim filed is outside the purview of Section 11B of the CEA, 1944.

Before the CESTAT, the AR submittedthat from the records it is evident that in the case of two invoices raised, the service was provided in 2007 whereas the invoices were issued in 2008. Inasmuch as the date of actual supply of export of service should be taken as the relevant date u/s 11B as held by the CESTAT in the case of M/s. Affinity Express India Pvt. - 2014-TIOL-1035-CESTAT-MUM and in case of GTN Engineering (I) Ltd. - 2012-TIOL-369-HC-MAD-CX.

The respondent submitted that since services are exported the relevant date for limitation given in Section 11B will be date when invoices were raised or date of payment will be the date of export of service. It is further informed that the refund claim was filed with the department on 15.4.2009 and the export invoices were raised on 21.4.2008, 30.4.2008, 19.5.2008, 30.5.2008, 3.6.2008, 6.6.2008, 10.06.2008, 27.6.2008 and 30.06.2008; the payment of service was received thereafter and, therefore, the refund has been filed within the time limit of one year under the provisions of Section11B. Moreover, the time limit stipulated u/s 11B is not applicable in cases of refund claim made under Rule 5 of the CCR, submitted the respondent.

The Single Member Bench extracted clause 6 of the Appendix to the notification No. 5/2006-CE(NT), the definition of ‘relevant date' as appearing in section 11B of CEA, 1944 and observed -

++ The first question which arises is whether the above provisions of Central Excise Act will apply to services under the Service Tax Act, as Section 11B applies to goods only. I note that under Section 83 of the Finance Act, the provisions of Section 11B of the Central Excise Act, shall apply in relation to service tax as they apply in relation to a duty of excise. Therefore, it is inferred that just as the relevant date in the case of Central Excise is the date of export of goods, the relevant date in the present case would mean would be the date on which the services are exported. This view is also stated in the case of M/s. Affinity Express India Pvt. Ltd. (supra) and GTN Engineering (I) (supra) . This being my stated view, the respondent would be eligible for refund in respect of all invoices except two invoices, namely invoice No. RPIN/EOU/2008/033 dt. 27/06/2008 and invoice No. RPIN/EOU/2008/037 dt.30/06/2008 under which the services were provided in 2007 but billed in June 2008 and for which refund is claimed on 15.4.2009. I hold accordingly.

Having held as above, the Single Member Bench further observed that on similar matters, there were differing judgments in the following cases as below -

++ In the case of Affinity Express India Pvt. Ltd. (supra) it was held that the relevant date for determining the period of limitation will the date of export of services or the date when the invoices are raised.

++ In the case of Business process Outsourcing (I) Pvt. Ltd. Vs. C.C. & S.T., Bangalore - 2014-TIOL-2384-CESTAT-BANG, it was held that the relevant date should be the date on which consideration is received, whether it is part or full or advanced.

++ Bechtel India Pvt. Ltd. Vs. Commissioner of Central Excise, Delhi - 2013-TIOL-1977-CESTAT-DEL held that the relevant date is the date of receipt of foreign exchange.

Inasmuch as to have uniformity on the issue, the Member(Technical) opined that it was his considered view that the matter should be referred to Larger Bench.

And so, the following question is referred to the President for consideration by the Larger Bench -

Whether the “relevant date” for deciding the limiting period of one year under Clause 6 of Appendix to Notification 5/2006-CE(NT) dt. 14.3.2006 for sanction of refund of Cenvat Credit under Rule 5 of Cenvat Credit Rules read with Notification No. 5/2006-CE (NT) dt. 14.3.2006 in the case where service is exported is -

(a) The date of export of service, or

(b) The date of export invoice, or

(c) The data of receipt of foreign exchange whether is is part of full or advanced

Or

(d) The date when both activities have been completed i.e. service has been exported and foreign exchange has been received (as foreign exchange may be received in advance)

(See 2014-TIOL-2397-CESTAT-MUM)