Decided on December 24,2015

Affinity Express India Pvt. Ltd. Appellant
Commissioner Of C. Ex., Pune -I Respondents

Referred Judgements :-



ANIL CHOUDHARY,MEMBER (J) - (1.)The present appeal is against the Order -in -Appeal No. P -I/RKS/02/2011, dated 4 -1 -2011 passed by the Commissioner of Central Excise (Appeals), Pune -I by which the refund claim filed by the Appellant has been partially rejected. The brief facts of the case are that the Appellant "M/s. Affinity Express India Pvt. Ltd." was engaged in providing taxable services under the category of "Business Auxiliary Services" and "Management Consultancy Services." The Appellant had filed refund claim of Rs. 26,19,979/ - for period January 2009 to March 2009, under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 05/2006 -C.E. (N.T.), dated 14 -3 -2006 as they were not in a position to utilize the input service credit availed against the services exported during the said period. The ld. Assistant Commissioner on examining the refund claim allowed the refund of Rs. 4,94,502/ - and rejected the refund claim for the balance amount.
1.1 Aggrieved by the said Order -in -Original the Appellant filed an appeal before the ld. Commissioner (Appeals) in respect of the partial refund claim rejected. The ld. Commissioner (Appeals) considering the submissions of the Appellant rejected the refund claim to the extent of Rs. 21,23,009/ -. The Appellant had accepted before Commissioner (Appeals) the rejection of refund by the original authority of Rs. 70/ -. The Appellant is in appeal before this Tribunal in respect of the total amount rejected by the Commissioner (Appeals) which is as under:

(2.)The Learned Counsel for the Appellant makes his submissions as under:
Time -barred refund claim

2.1 The ld. Counsel submits that in the present case the refund is filed under Rule 5 of the Cenvat Credit Rules, 2004 (Cenvat Rules) read with Notification No. 5/2006 C.E. (N.T.), dated 14 March 2006. He submits that clause 6 of Notification No. 5/2006 (supra) mentions that the refund claim may be filed before the expiry of the period specified under Sec. 11B of the Central Excise Act, 1944. He submits that Rule 5 of the Cenvat Rules permits refund of credit accumulated over a period of time and upon a condition that the service provider is not able to utilise the said credit on account of export nature of his output service which did not attract service tax. With this background if one looks at clause (B) to the Explanation appended to Sec. 11B of the Central Excise Act, 1944 none of the sub -clauses therein would apply to determine the 'relevant date' for refund filed under Rule 5 of Cenvat Rules. In other words, Notification No. 5/2006 (supra), does not throw any light on the date from which the limitation of Sec. 11B has to be reckoned. In view of this he submits that no time limit should apply for the refund claim of Rule 5 of the Cenvat Rules. He supports his contention with various case laws including that of Deepak Spinners Ltd. v/s. CCE, Indore - : 2014 (302) E.L.T. 132 and Elcomponics Sales Pvt. Ltd. v/s. CCE, Noida - : 2012 (279) E.L.T. 280 and Global Energy Food Industries v/s. CCE, Ahmedabad -, 2010 (261) E.L.T. 627. His alternative submission is, in any case, the period of one year should be computed from the date of receipt of foreign exchange for the service exported and not from the date of invoice. For this preposition he relies on the decision of this Tribunal in the case of Vodafone Cellular Ltd. v/s. CCE, Pune III in Order No. A/31 -39/14/CSTB/C -I, dated 18 -12 -2013 [2014 (34) S.T.R. 890 (Tribunal)], which considered service tax rebate on account of export of service.

Restriction of refund related to embroidery software development

2.2 The ld. Counsel submits that their claim has been reduced on account of embroidery software development service being inadvertently disclosed in the Service Tax return as export of final products instead of export of output service. He submits that from the agreement with their customer, it is evident that the activity is of service and not in the nature of a product. In any case, he submits that so long as whether a product or a service is exported, both will be covered under Rule 5 of Cenvat Rules and therefore it is incorrect to reduce their export turnover and reject the corresponding refund only on account of embroidery software development being shown as a final product in the return instead of output service.

Challenge to certain input services

2.3 The learned Counsel further submits that their claim has also been rejected on account of challenge to Cenvat credit claimed on transport services, Xerox charges, courier charges and meal coupons. He submits that these services are used for providing their output service. He also further submits that it is not Revenue's case that for transport service and for meal coupons, they have recovered any part of cost of these services from their employees. He also submits that at the stage of claiming credit there was no objection raised by the Revenue and hence such objection cannot be raised at the stage of adjudicating refund under Rule 5 of Cenvat Rules.

(3.)The learned Authorised Representative for the Revenue, Shri N.N. Prabhudesai submits that when Notification No. 5/2005 (supra) specifically provides for time limitation under Sec. 11B of the Central Excise Act, refund filed beyond the period of one year from the date of invoice is rightly rejected by the lower authority. With regard to the embroidery software service, he submits that the appellant being a service provider should not have mentioned embroidery software service as final product in their return and therefore the rejection of refund on this account is also correct. With respect to denial of refund on account on certain input services, he reiterates the findings of the lower authority.

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