Issue:- Whether filing necessary details of input service after export can be treated as sufficient compliance for claiming refund of service tax?

PJ/Case Law/2013-14/2113

Case:- TACO FAURCIA DESIGN CENTER P LTD & FAURECIA TECHNOLOGY CENTRE INDIA P LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-III

Citation:- 2014-TIOL-318-CESTAT-MUM

Brief facts:- The appellant was in appeal against the impugned order for denial of their rebate claim of input services used by them for export of services along with an application for condonation of delay.

The reasons for causing the delay in filing the appeal against the impugned order were that the appellant filed composite appeal but they were required to file three appeals as the impugned order contained three Order-in-Original. As the main appeal had been filed in time, and consequently on pointing out by the Registry, they filed these appeals, therefore delay was condoned.

The brief facts of the case were that appellant were service provider of consulting engineering service which ultimately exported by them. To provide the said service, the appellant used certain input service. After export of services for the period September 2004 to August 2005, the appellant filed rebate claim of the input service received by them as per Notification 12/05. The said rebate claim were rejected on the premise that the appellant had contravened the condition of the said Notification, as they were not registered with the department prior to export and they had not filed their service tax returns before the department. Lastly, their claim of refund was barred by limitation. Aggrieved from the said order, appellant was before Tribunal.

Appellant’s contentions:- The ld. CA appearing on behalf of the appellant submitted that as per Notification 12/05 the appellant were required to file a declaration prior to export of taxable services. The description, quantity, value, rate of duty and amount of duty payable on input services actually required to be used in providing taxable service to be exported. Admittedly, this condition could not be fulfilled by the appellant. In support of this contention, they relied on the decision of Wipro Ltd. 2013 (29) STR 545 = (2013-TIOL-119-HC-DEL-ST) and submitted that this condition could not be fulfilled before actual export of service, therefore the Hon'ble High Court held that this condition was not required to be fulfilled. With regard to the registration, he submitted that as per Section 69 of the Finance Act, 1994 the assessee who was required to pay service tax was required to obtain registration. Admittedly, they were not providing taxable service that was exempted. Therefore, registration was not required. Consequently, they were not required to file service tax returns. On the issue of time bar, he submitted that as it was a case of export of service and as per Notification 12/05 export was complete when the remuneration of the exported service had been received in convertible foreign exchange. Therefore, the date of which they received the remuneration towards the services exported was to be the date of providing the service. To support this contention, he relied on CCE vs. Eaton Industries P. Ltd. 2011 (22) STR 223 = (2011-TIOL-166-CESTAT-MUM).

Respondent’s contentions:- On the other hand, ld. AR opposed the contention of the consultant and submitted that the condition of the Notification were to be complied with. He also submitted that the date when the services were exported and invoice had been issued for the same, therefore same may be treated as date of export. Accordingly, their some of the rebate claim were barred by limitation and as they had failed to comply with the condition to Notification 12/05 therefore, their refund claims were to be rejected.

Reasoning of judgment:- In the case, rebate claim had been rejected firstly on the premise that the appellant had failed to fulfill the procedure laid down as per Notification 12/05. The issue of fulfilling the procedure laid down in the Notification 12/05 came before the Hon'ble high Court in the case of Wipro Ltd. (supra) wherein the Hon'ble High Court held that filing of declaration after date of export of service was not such non-compliance as to disentitle exporter from rebate. Nature of services was they were rendering service on continuous basis without any commencement or terminal point, and it was difficult to complete with the requirement "prior" to the date of export, except for the description of services. It was further held that if particular declarations were furnished with the service tax authorities along with documentary evidence were found to be correct, object of filing of declaration would be satisfied.

In these circumstances, as the appellant had filed all the necessary details of input service even after export were to be treated as in compliance of Notification 12/05. Accordingly, on this ground they were entitled to refund claim. Further, Hon’ble Judge found that rebate claim was denied on the ground that they had not taken the registration. The issue came up before this Tribunal in Textech International P. Ltd. 2011 (21) STR 289 = (2010-TIOL-1800-CESTAT-MAD) wherein this Tribunal held that as per Section 69 of the Finance Act, 1994 a person who was liable for paying service tax was required to apply for registration. Admittedly, the appellant was although providing taxable service but the same was exempted therefore, they were not required to pay service tax, registration was not required. As the appellant was not required to pay service tax, therefore, they were not required to file service tax returns. Further, on the issue of limitation, the issue came up before this Tribunal in Eaton Industries (supra) wherein the relevant date for filing refund in the case of export of service was in the date of receipt of payment of the exported service.

In these circumstances, he held that rebate claim filed by the appellant were within limitation. On merits also, the appellant were entitled for refund.

In view of the above findings, the impugned order was set aside and appeals were allowed with consequential relief, if any.

Decision:- Appeal allowed.

Comment:- The analogy drawn from the case is that if particular declarations that were required to be furnished before actual export were furnished with the service tax authorities along with documentary evidence after export and were found to be correct, the object of filing of declaration would be satisfied and be treated as compliance of the condition of the Notification 12/05. Moreover, it was also concluded that the relevant date for filing refund claim in the case of export of service was the date of receipt of payment for the exported service. Hence, the refund claim was within the limitation period and was allowed on merits

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PJ/Case Law/2013-14/2113

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