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Commissioner of Service Tax, Mumbai V/S Sequoia Capital India Advisors Pvt. Ltd. and Others.

    Appeal Nos. ST/87452 and 87453/17 (Arising out of Order-in-Appeal No. PKJ/ST-I/MUM/94/2017-18 dated 05.06.2017 passed by the Commissioner Service Tax (Appeals), Mumbai)

    Decided On, 29 January 2018

    At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai

    By, THE HONORABLE JUSTICE: RAMESH NAIR
    By, MEMBER AND THE HONORABLE JUSTICE: RAJU
    By, MEMBER

    For Petitioner: M.K. Sarangi, Jt. Commissioner (AR) And For Respondents: R. Kumaravel, Cost Accountant and Prasad Paranjape, Advocate



Judgment Text


1. The issue involved in this case is whether the time period for filing refund under Rule 5 i.e. one year from the date of invoice or from the receipt of convertible foreign exchange against the export of service.

2. Shri M.K. Sarangi, learned Jt. Commissioner (AR) appearing on behalf of the Revenue submits that the learned Commissioner (Appeals) has allowed the refund on the ground that the period for filing refund is to be computed from the date of receipt of consideration in convertible foreign exchange. He submits that as per the explanation 1 of sub-rule (2) of Rule 5, the export service means the service which is provided as per the provisions of Expo

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rt of Service Rule, 2005 whether the payment is received or not. Accordingly, the payment is not a criteria for the period of filing refund claim. Therefore, the refund should have been filed within one year from the date of invoice and not from receipt of convertible foreign exchange towards the export of service. He submits that the judgment relied upon by the learned Commissioner (Appeals) are not for the relevant period as in the case of Bechtel India Pvt. Ltd. Vs. Commissioner of Central Excise, Delhi 2014 (34) STR 437 (Tri-Del), the period involved is 2005-06. During that time, the definition of export service under rule 5 was different. Therefore, the judgment of Bechtel India Pvt. Ltd. (supra) and similar other judgment i.e. Infosys Technologies Ltd. is not applicable in the present case. He submits that as regards the judgment in the case of SPEC India Ltd. Vs. Commissioner of Service Tax, Ahmedabad : 2016 (45) STR 472 (Tri-Ahmd), the Hon'ble Gujarat High Court has admitted the Tax appeal of the assessee, which is reported at 2016 (45) STR J206 (Guj.).

3. On the other hand, Shri Prasad Paranjape, learned Counsel appearing on behalf of the respondent submits that the learned Commissioner (Appeals) is right in holding that the relevant date for the purpose of computing the limitation period for grant of refund under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 27/2012-CE (NT) dated 18.6.2012 should be the date of realization of consideration towards export of service. He further submits that the relevant notification No. 27/12-CE (NT) dated 18.6.2012 in which clause (3)(d) suggests that the applicant should file refund claim along with Bank realization certificate in respect of export of service. That means refund can be filed only after the realization of the consideration. As per Rule 6A of Service Tax Rules, 1994, export of service means when inter alia the payment of such service is received by the provider of service in convertible foreign exchange. Therefore, the export is completed only when the payment is received. He placed reliance on the following judgments:-

(a) Commissioner of Central Excise & Service Tax Vs. Hyundai Motor India Engineering (P) Ltd : 2015-TIOL-739-HC-AP-Service Tax.

(b) CST, Goa Vs. Ratio Pharma India Pvt. Ltd.: 2015 (39) STR 31 (Tri-LB).

(c) Bechtel India Pvt. Ltd. Vs. Commissioner of Central Excise, Delhi 2014 (34) STR 437 (Tri-Del).

(d) Commissioner of Central Excise, Pune-I Vs. Eaton Industries Pvt. Ltd. 2011-TIOL-166-CESTAT-MUM.

(e) Spec India Vs. CST, Ahmedabad : 2016 (45) STR 472 (Tri-Ahmd).

3.1 He further submits that as regards the submission of the learned AR as per the meaning of the export of service provided under rule 5, the export of service means the service provided as per the provision of Export of Service Rules, 2005 whether the payment is received or not. In this regard, the meaning of export of service under rule 5 was amended from 1.7.2012 and thereafter the meaning of export of service was given as export of service means the services which is provided as per Rule 6A of the Service Tax Rules, 1994. He submits that in the present case, the period involved is July, 13 to Sept, 13, therefore the reliance placed by learned AR on Notification No. 18/2012 is misplaced and not relevant.

4. We have carefully considered the submissions made by both sides and perused the records. We find that in both the cases, the period involved is after 1.7.2012. Prior to 1.7.2012, the definition of export of service under Rule 5 was as under:-

export service means the service which is provided as per provision of Export of Service Rules, 2005 whether the payment is received or not.
However, from 1.7.2012, the aforesaid definition of export service under Rule 5 was amended. The amended definition reads as under:-

export service means the service which is provided as per Rule 6A of the Service Tax Rules, 1994.
Since all the relevant claims are pertaining to the period after 1.7.2012 only the amended definition of export service is applicable. Rule 6A of Service Tax Rules, 1994 are read as under:-

RULE [6A. Export of services. (1) The provision of any service provided or agreed to be provided shall be treated as export of service when,-

(a) the provider of service is located in the taxable territory,

(b) the recipient of service is located outside India,

(c) the service is not a service specified in the section 66D of the Act,

(d) the place of provision of the service is outside India,

(e) the payment for such service has been received by the provider of service in convertible foreign exchange, and

(f) the provider of service and recipient of service are not merely establishments of a distinct person in accordance with item (b) of Explanation 2 of clause (44) of section 65B of the Act.

(2) Where any service is exported, the Central Government may, by notification, grant rebate of service tax or duty paid on input services or inputs, as the case may be, used in providing such service and the rebate shall be allowed subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification.]

From the plain reading of the above Rule 6A, it can be seen that as per sub-rule (1) clause (e), the payment for such service should be received by the provider of service in convertible foreign exchange. Therefore, unless and until the payment consideration in convertible foreign exchange against the export of service is received, the export of service is not complete. Accordingly, the relevant date of one year for filing of refund claim should be reckoned from the date of receipt of convertible foreign exchange. Since the department in appeal has raised only the issue of time limit for filing the refund claim, we are not going into any other issue.

5. Accordingly, the impugned order is upheld and Revenues appeals are dismissed
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