CASE LAW
2018-TIOL-516-CESTAT-BANG-LB + Story
CCE & ST Vs SPAN INFOTECH INDIA PVT LTD: BANGALORE CESTAT (Dated: February 9, 2018)
ST - Export of Services - CENVAT - Refund u/r 5 of CCR, 2004 - Relevant date is the end of the quarter in which the FIRC is received: CESTAT LB [para 13]
Reference answered
Observations of Larger Bench -
++ The relevant date specified u/s 11B of the CEA, 1944 leaves no room for doubt as far as export of goods is concerned. However as far as export of services is concerned, the various sub-sections specifying relevant date under Section 11B do not cover the case of export of services. Further the exporters of services have been given the option to file claims for such refunds once in a quarter and in respect of 100% EOUs, once in a month.
++ After considering the provisions of the Notifications issued under Rule 5 of the CCR, we note that there is a specific condition that the refund claims are required to be filed within the period specified under Section 11B. Consequently, we are of the view that completely ignoring the provisions of Section 11B may not be appropriate.
++ The definition of relevant date in Section 11B does not specifically cover the case of export of services. Hence, it is necessary to interpret the provisions constructively so as to give it meaning such that the objective of the provisions; i.e. to grant refund of unutilized CENVAT credit, is facilitated.
++ By reference to the Service Tax Rules, 1994 as well as the successor provisions i.e. the Export of Services Rules, 2005, we note that export of services is completed only with receipt of the consideration in foreign exchange. Consequently, the date of Foreign Inward Remittance Certificate (FIRC) is definitely relevant.
++ The related question for consideration is whether the time limit is to be restricted to the date of FIRC or can be considered from the end of the quarter.
++ Revenue has expressed the view that relevant date in the case of export of services may be adopted on the same lines as the amendment carried out in the Notification No.27/2012, w.e.f. 01/03/2016 [ 14/2016(NT) refers] . Essentially after this amendment the relevant date is to be considered as the date of receipt of foreign exchange.
++ While this proposition appears attractive, we are also persuaded to keep in view the observations of the Hon'ble Supreme Court in the case of Vatika Township (= 2014-TIOL-78-SC-IT-CB ), in which the Constitutional Bench has laid down the guideline that any beneficial amendment to the statute may be given benefit retrospectively but any provision imposing burden or liability on the public can be viewed only prospectively.
++ We conclude that in respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis.
