Order Date – 22 September 2023

Parties: Commissioner of GST and Central Excise Vs. M/s. Verizon Data Services India Pvt. Ltd.

Facts –

• The Respondent, M/s. Verizon Data Services India Pvt. Ltd., had filed refund claims for refund of input service tax credit for different periods under Rule 5 of the CENVAT Credit Rules, 2004, in regard to the export of their output service.
• After due process of law, the original authority sanctioned certain amount and rejected the refund in respect of certain services.
• Both the respondent and the department filed the appeal.

Issue –

• Whether the refund of input service tax credit in regard to the export of output service is available?

Order –

• The Tribunal observed that the Larger Bench of the Tribunal in the case of M/s. Span Infotech India Pvt. Ltd. has held that in the case of refund in respect of services exported, the relevant date for computation of the period of one year is the date of realization of the foreign exchange and not the date of invoice. Hence the rejection of refund alleging that the refund claim filed is beyond the period of one year will not be valid as the authorities below have computed the period of one year form the date of invoice.
• It is seen that the assessee is discharging Service Tax under Manpower Recruitment and Supply Agency Services as the recipient of service under reverse charge mechanism. This cannot be considered as the domestic turnover. While applying the formula, the output service provided by the assessee in the domestic area has to be considered. The authorities below have applied the figures in relation to Manpower Recruitment and Supply Agency Services, thus, the issue found to be in favor of the assessee
• After considering the various services, the tribunal found that the rejection of the refund claim alleging that these services have no nexus with the output service provided by the assessee is without legal or factual basis. The issue is held in favor of the assessee as in the assessees‟ own case for different period, the Commissioner (Appeals) has allowed refund in respect of very same services.
• Finally, regarding the wrong application of formula for calculating the eligible refund, the tribunal found that the total input credit availed by the assessee which has to be taken for calculating the eligible refund. the authorities below have deducted the refund amount alredy sanctioned for an earlier period instead of applying the total input credit availed by the assessee.
• Regarding the appeal filed by the departmnet that refund allowed on and that assessee is not eligible for the same, as the credit availed after the last date of export, it was held that when the refund claim is filed periodically for different quarters, there is no requirement of one to one co-relation. The credit availed for the exports have to be considered.
• The remanded to the adjudicating authority to reconsider the issues with regard to calculation of eligible refund.