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Judgment
Particulars,Appeal No.ST/20336/2020,Appeal No.ST/20337/2020
Period of dispute,January 2017 to March 2017,April 2017 to June 2017
Refund claimed,"Rs.8,45,339/-","Rs.12,15,125/-
Refund filed on,21/12/2017,28/3/2018
SCN date,31/01/2018,12/04/2018
OIO dt.,30/04/2019,30/04/2019
OIA No. and date,No.333 & 334/2020 dt. 25/06/2020,
,,
She also placed reliance on the judgment of Ion Exchange (I) Ltd. Vs. CCE,Cus. & ST, Surat-II [2018(12) GSTL 302 (Tri. Ahmd.)]. Regarding",,
Insurance Auxiliary Services, the learned counsel did not press for the refund of the said input service because of small amount involved and the",,
appellant could not produce invoice in regard to that service and hence she did not press for refund of this amount. Learned counsel also prayed for,,
grant of interest for the delay in granting the refund and she has cited the following decisions:-,,
i. Ranbaxy Laboratories Ltd. Vs. UOI [2011-TIOL-105-SC],,
ii. Xerox Business Services India Pvt. Ltd. Vs. CCT &CE [2019- TIOL-508-HC-KERALA],,
iii. Reliance Industries ltd. Vs. CCE [2014-TIOL-1486-CESTATAhmedabad],,
On the other hand, the learned AR reiterated the findings of the impugned order and submitted that the appellant has not complied with the",,
conditions as provided in Rule 6A(1)(b) and Rule 6A(1)(d) of Service Tax Rules, 1994. Learned AR further submitted that the",,
Commissioner(Appeals) has given detailed reasons for rejection of the refund claims on the ground that the appellant could not prove the export of,,
service and further the learned AR submitted Works Contract Service has been excluded from the definition of input service as provided in Rule 2(l),,
as there is no nexus with the resultant output service rendered by the appellant.,,
6.1. After considering the submissions of both the parties and perusal of the material on record, I find that the appellant have entered Sourcing Service",,
Agreement with WMGS Services Ltd. Located in British Virgin Island and WMGS Netherlands located in the Netherlands and as per the JV,,
agreement, the appellant was directed to raise the invoices in the name of WMGS China JV and accordingly the appellant have been raising invoices",,
directly to WMGS China JV. Further after perusing the terms of both the agreements placed on record by the appellant, I find that the appellant is",,
providing services to WMGS BVI and WMGS Netherlands in accordance with the Sourcing Agreement without any deviation as per the JV,,
agreement. Further I find that the appellant has complied with the conditions prescribed under Rule 6A(1)(b) of Service Tax Rules, 1994 because the",,
service recipient is located outside India and further as per Rule 3 of Place of Provision Rules, place of provision of the impugned services will be the",,
location of the service recipient. Further I also find that the appellant have been receiving foreign inward remittances on their export invoices which,,
were coming to the appellant in terms of JV agreement from a designated bank account specifically opened for the said purpose. I also find that in the,,
FIRCs, the purpose of remittance is clearly stated as ‘payment for services of buying contract’ which is nothing but Sourcing Services rendered",,
by the appellant. Further I find that the appellant cannot be denied the benefit of export of services simply on the ground that payment has been routed,,
through a 3rd party which is also based outside the country. In this regard, I find that the decision relied upon by the appellant in the case of Nipuna",,
Services Ltd. Cited supra, is applicable in this case also, wherein refund has been allowed to claimant even if the consideration for the export of",,
service is received from a third party. Further as far as denial of refund on Works Contract Service is concerned, I find from the various invoices",,
submitted by the appellant that the said input service was used towards renovation of the premises occupied by the appellant and the said premises,,
was used towards provision of output services and therefore eligible for the purpose of claiming cenvat credit. Further the Board’s circular dt.,,
29/04/2011 relied upon by the appellant has clarified that the input service used in modernisation, renovation or repair is eligible for credit and the same",,
thing has been held in the case of Ion Exchange (I) Ltd. Cited supra. As far as refund pertaining to Insurance Auxiliary Service is concerned, learned",,
counsel did not press for the same as the amount involved is small.,,
6.2. As far as claim of interest on delay in refund is concerned, I find that as per the decision in the case of Ranbaxy Laboratories (supra), appellant is",,
also entitled for grant of interest on delayed refund claim beyond the period of three months. It is pertinent to note that the apex court in the case of,,
Ranbaxy Laboratories (supra) has held as under:,,
“9. It is manifest from the afore-extracted provisions that Section 11BB of the Act comes into play only after an order for refund has,,
been made under Section 11B of the Act. Section 11BB of the Act lays down that in case any duty paid is found refundable and if the duty is,,
not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B,,
of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three",,
months from the date of receipt of the application. The Explanation appearing below Proviso to Section 11BB introduces a deeming fiction,,
that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central,,
Excise but by an Appellate Authority or the Court, then for the purpose of this Section the order made by such higher Appellate Authority or",,
by the Court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. It is clear that the Explanation has,,
nothing to do with the postponement of the date from which interest becomes payable under Section 11BB of the Act. Manifestly, interest",,
under Section 11BB of the Act becomes payable, if on an expiry of a period of three months from the date of receipt of the application for",,
refund, the amount claimed is still not refunded. Thus, the only interpretation of Section 11BB that can be arrived at is that interest under",,
the said Section becomes payable on the expiry of a period of three months from the date of receipt of the application under sub-section (1),,
of Section 11B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under,,
Section 11BB of the Act becomes payable.,,
….,,
….,,
In view of the above analysis, our answer to the question formulated in para (1) supra is that the liability of the revenue to pay interest",,
under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under,,
Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made.â€,,
6.3. Further, Kerala High Court in the case of Xerox Business Services India Pvt. Ltd. (supra) and also apex court in the case of UOI vs. Hambard L",,
(Waqf) Laboratories, have held that the assessee is eligible for interest on refund amount sanctioned, in case, there is a delay beyond the stipulated",,
period of three months as prescribed under the law. Hence, I hold that appellant is entitled for the interest on the delayed sanction of the refund.",,
In view of my discussion above, I set aside the impugned order except the refund amount pertaining to Insurance Auxiliary Service. Appeals are",,
accordingly allowed on above terms.,,
(Order was pronounced in Open Court on 14/07/2021),,