Thursday, February 3, 2011

Relevant date for filing of refund of credit in respect of Export services---When Payment is received

Relevant date for filing of refund of credit in respect of Export services is the date when the payment of service (exported) is received and not date of providing the service

COMMISSIONER OF CENTRAL EXCISE, PUNE I Vs EATON INDUSTRIES P LTD

Revenue has filed this appeal against the impugned order wherein the lower appellate authority has given a finding that what should be the relevant date for filing the refund claim in the case of export of services. The Commissioner(Appeals) has held that in such a case the relevant date is the date when the payment of service (exported) is received by the assessee not the date when the service is provided. Against that order, Revenue is in appeal on the premise that the relevant date is the date of service tax paid as per section 11B of Central Excise Act, 1944.


2. Heard and submitted.


3. I have gone through the rule 5 of the Cenvat Credit Rules, 2004 which deals with refund of credit in the case of export. The provisions of rule 5 are:-


“5. Where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of,


(i) duty of excise on any final product cleared for home consumption or for export on payment of duty; or


(ii) service tax on output service,


and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification:


Explanation: For the purposes of this rule, the words 'output service which is exported' means the output service exported in accordance with the Export of Services Rules, 2005.”


4. As per the explanation to Rule 5, to claim refund of service tax in the case of export of service, the Export of Service Rules, 2005 are applicable.


5. Export of Service Rules, 2005, rule 3(2) deals with the situation where it has been described that what are provisions of export of service.


6. Rule 3(2) of the export of Service Rules, 2005 are reproduced hereunder:-


“[(2) The provision of any taxable service specified in sub-rule (1) shall be treated as export of service when the following conditions are satisfied, namely:-


(a) [Omitted]


(b) payment for such service [* * *] is received by the service provider in convertible foreign exchange.”


7. From the above provision, it is very much clear in the case of export of service, the relevant date is the date when the payment of service exported has been received by the assessee.


8. In the instant case the lower appellate authority has also held that in the case of export of service the relevant date is the date when the assessee has received the payment of service exported and within one year from the date of receipt of the payment of service exported, the assessee is required to file the refund claim.


9. Accordingly, I do not find any infirmity with the finding of the lower appellate authority on this ground. Hence, the appeal filed by the revenue deserves, no merit therefore is rejected.


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