Whether non receipt of consideration in convertible foreign currency for services exported be grounds for rejecting refund claim?

PJ/Case Laws/2012-13/1361

Case:- STERLING HOFFMAN SOFTWARE CONSULTANT P. LTD. Vs.C.C.E., VADODARA

Citation:- 2012 (28) S.T.R. 253 (Tri. - Ahmd.)

Brief Facts:- The appellant is registered as service provider for Business Support Service. Appellant is not providing any service in DTA and all the services are exported only. Appellant filed two refund claims for two different periods for claiming refund of service tax paid by them on various input services. The refund claims have been rejected on three grounds. The first ground taken by the Revenue is that the appellant did not receive the consideration for the services provided in convertible foreign currency. The second ground taken is that in respect of a portion of the refund claim, the date of providing service is not available and if the date is taken as the date of receipt of service tax, the claim is time-barred. The third ground taken for rejection the refund claim is that appellant did not maintain proper accounts in respect of input services. Aggrieved by the order of Commissioner (Appeals) appellant filed an appeal before Tribunal.

Reasoning of Judgment:- The Tribunal heard both sides and considered that as regards receipt in foreign currency, it was submitted by appellant that no doubt the amount has been paid to the appellant in Indian currency only. However, according to the RBI instructions no Indian firm can be paid in foreign currency in India. He relied upon a certificate issued by ICICI Bank (their banker) who has stated that - they had collected the amount on behalf of the appellant from a Canadian firm to whom the services were exported. The certificate confirms that payment of Canadian company was converted into Indian currency and paid to the appellant. In view of the clear evidence provided in the form of certificate issued by ICICI bank and in view of the legal requirement submitted by the appellant, the Tribunal fully agree and consider the rejection of refund claims on this ground is unwarranted.

Coming to the second ground that the appellant submitted that even though, if the date of invoice is taken, only a small amount involved in the refund claim is time-barred. Having regard to the fact that total amount held to be ineligible, the appellant is willing to forego the same and will not contest the same. Accordingly, this portion of the appeal is held as uncontested and rejection is upheld.

As regards the third ground that appellant has not maintained proper accounts, a statement showing details maintained in computer was produced. From the statement it is seen that the account, maintained in computer contains all the details which are required for verifying the type of service received, the amount of consideration paid, service tax payable and paid, date of payment of Service tax by the appellant, name of service provider, etc. Further, it is found that apparently the invoices received by the appellant contain all the details and the account maintained in the computer also contains all the details. Legally the assessees are entitled to maintain the accounts in the computer and there is no indication in the orders of the lower authorities that appellant has not fulfilled the requirement of the law in maintaining accounts in computer. Further, except for the daily stock account, assessees are entitled to maintain the account in the format convenient to them. Having regard to these legal provisions and also from the statement produced by the learned counsel during the hearing which shows that appellant is maintaining detailed account in the computer system, The Tribunal consider that this is not a valid ground for rejection of refund claim.

Decision:- Appeal is allowed.

Comment:- It is observed from this case also that refund claim is rejected on petty grounds as if there is no intention to grant refund.

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PJ/Case Laws/2012-13/1361

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