Refund of CENVAT Credit in case of 100% exporter of services
Since in the present case, 100% services are exported therefore total turnover and exports turnover will come to the same amount and accordingly entire Cenvat credit availed by the appellant irrespective of any period shall become refundable,
CESTAT, MUMBAI BENCH
Q Logic India (P.) Ltd. v/s.Commissioner of Service Tax, Pune
RAMESH NAIR, JUDICIAL MEMBER
ORDER NO. A/87789/2016/SMB
APPEAL NO. ST/86486/2014
FEBRUARY 10, 2016
V.Y. Khare, Company Secretary for the Appellant. B. Kumar Iyer, Superintendent (AR) for the Respondent.
1. This appeal is directed against Order-in-Appeal No. PUN-EXCUS-003-APP-360-13-14, dated 5.2.2014 passed by the Commissioner of Central Excise (Appeals), Pune – III, whereby ld. Commissioner(Appeals) rejected the refund claim of Rs. 6,39,121/- for the period April – June, 2012.
2. The fact of the case is that the appellant is engaged in providing ‘Information Technology Software Services’. They had filed refund claim for Rs. 31,71,969/- on the ground that during the period April-June, 2012 they had exported taxable output services valued of Rs. 17,96,69,852/- without payment of Service tax, hence they filed refund claim of accumulated Cenvat Credit under Rule 5 of Cenvat Credit Rules, 2004. On scrutiny of refund it was found that appellant had availed Cenvat credit of Rs. 25,59,408/- during the period from April – June, 2012. However Cenvat credit of Rs. 6,12,463/- was availed in the month of February, 2012, which they had not claimed in their refund claim pertains to quarter ending March, 2012. The sanctioning authority held that the Cenvat credit of Rs. 25,59,408/- pertaining to the period of claim i.e., April- June, 2012 is only admissible therefore the same was sanctioned. Cenvat credit amounting to Rs. 26,560/- was held inadmissible for reason that the same is for hall charges, food charges,
parking services which is in the name of Neha Sarpotdar therefore it is not input service hence the same was reduced while sanctioning refund claim. Thus Adjudicating authority have not sanctioned the refund of Rs. 6,12,463/- and Rs. 26,560/-. Aggrieved by the Order-in-Original appellant filed appeal in respect of Rs. 6,12,463/- before the Commissioner(Appeals), who concurring with the view of the adjudicating authority rejected the appeal on the ground that Cenvat credit of Rs. 6,12,463/- was availed in the month of February, 2012 and the same was carried forward in April, 2012 which is not permissible as the Cenvat credit availed during the April- June, 2012 can only claim as refund for that particular quarter and any credit availed before April, 2012 cannot be claimed in the subsequent quarter April- June, 2012. Aggrieved by the impugned order, appellant is before me.
3. Shri. V.Y. Khare, ld. Company Secretary appearing on behalf of the appellant submits that there is no dispute that the refund claim of Rs. 6,12,463/- is against the Cenvat credit availed in the month of February, 2012. However, refund in respect of this amount was admittedly not filed for the quarter ending March, 2012 therefore this amount has been carried forward in April, 2012. The total accumulated credit during the April-June, 2012 has to be considered as net Cenvat credit availed in the said quarter. Accordingly refund claim of total accumulated credit in quarter April-June, 2012 is admissible against exports of Services made during the said period. He submits that refund of this amount was only filed once for the quarter April-June, 2012 and no refund claim was filed for the same amount in January to March, 2012 therefore it is wrong to say that appellant has filed second refund claim for same quarter. He further submits that in the appellant’s case 100% output service is exported therefore entire Cenvat credit availed by them irrespective of the period is otherwise refundable. The period and formula will be effectively applicable only in a case when the appellant is engaged in the sale of services for exports as well as DTA. Since in the present case, 100% services are exported therefore total turnover and exports turnover will come to the same amount and accordingly entire Cenvat credit availed by the appellant irrespective of any period shall become refundable, for this reason also refund of Rs. 6,12,463/- could not have been rejected. Shri. Khare placed reliance on the judgment of this Tribunal in case of WNS Global Services (P.) Ltd. v. CCE [Appeal Nos. ST/71 & 72/2012, dated 6-5-2015] wherein it was held that brought forward credit of earlier quarter shall be included for the purpose on refund in the quarter where it was brought forward.
4. Shri. B. Kumar Iyer, ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.
5. I have carefully considered the submissions made by both sides and perused the record.
6. I find that both the lower authority have rejected the refund claim of Rs. 6,12,463/- on the ground that this credit pertains to period April, 2012 therefore the same cannot be taken as net Cenvat credit for the quarter April- June, 2012. I find that it is undisputed facts that appellant have first time claimed, the refund on this amount in the quarter April-June, 2012 and no refund claim was made for this amount prior to this quarter therefore it cannot be said that it is second refund claim for the quarter January to March, 2012. The Cenvat credit of Rs. 6,12,463/- they availed in the April, 2012 but same was carried forward in April, 2012. It was held in the case of WNC Global Services (P.) Ltd. (supra) that for the purpose refund, Cenvat credit of any particular quarter will include the amount of brought forward credit as well from the earlier quarter therefore following the ratio of the said decision, even though credit was availed in February, 2012 the same was lying in the balance as on 31 March, 2012, the same was carried forward to April, 2012 and therefore opening balance of April, 2012 will also be included for the purpose of taking the net Cenvat credit in the quarter April-June, 2012. It is also pertinent that undisputedly entire services of the appellant are exported, in such case entire Cenvat credit availed by the appellant has to be refunded to them. In my view the formula provided in the notification for calculation of refund amount is workable only in a situation when the assessee is engaged in the provisions of services which are exported as well as provided in the domestic market. For this reason also the appellant being 100% exporter of services is entitle for the refund of brought forward amount of Rs. 6,12,463/-. Since the refund is pertaining to the period April, June, 2012 it is well within the time period stipulated under the law. As per my above discussion, I am of considered view that the appellant is legally entitle for the refund of remaining amount of Rs. 6,12,463/-. The impugned order stands modified to above extent. Appeal is allowed, with consequential relief, if any, in accordance with law.