IT Services Exporter’s ₹16.62 Lakh Rebate Claim Was In Time, CESTAT Counts Limitation From Full Receipt Of Export Proceeds

The appellant exported IT and business-support services to its US affiliate under an invoice dated 30 June 2012 and paid service tax of ₹16,62,591.

The export proceeds were received in two instalments, with full realisation on 23 August 2012.

The appellant’s rebate claim under Rule 5 of the Export of Services Rules, 2005, was received on 1 August 2013.

The adjudicating authority rejected the claim as time-barred under Section 11B of the Central Excise Act, 1944, calculating the one-year period from the invoice date; the Commissioner (Appeals) upheld that decision.

Rule 5 of the Export of Services Rules, 2005, read with Notification No. 11/2005-ST dated 19 April 2005, governed the rebate claim and required receipt of consideration in convertible foreign exchange, supported by documentary proof.

Under Rule 3(2)(b) of the Export of Services Rules, as applicable during the relevant period, receipt of consideration in convertible foreign exchange was a condition for treating the service as exported.

Section 11B of the Central Excise Act, 1944, applied to the claim, but the relevant date for limitation in the context of exported services was not invariably the invoice date.

Applying the Larger Bench decision in CCE & ST, Bangalore v. Span Infotech India Pvt. Ltd., the Tribunal treated receipt of export consideration as relevant to determining limitation; that decision reckoned the one-year period from the last day of the quarter in which foreign exchange was received.

The Tribunal distinguished CCE v. GTN Engineering (India) Ltd. as concerning exported goods and therefore not directly determinative of the relevant date for exported services.

The Tribunal noted that the applicable export-service framework made receipt of convertible foreign exchange material to the export and rebate conditions.

It therefore rejected the Revenue’s position that limitation must necessarily run from the invoice date, distinguishing the goods-export context in GTN Engineering and applying the reasoning in Span Infotech as adopted in Sutherland Global Services Pvt. Ltd. v. Commissioner of GST & Central Excise.

Since the proceeds were fully realised on 23 August 2012 and the claim was received on 1 August 2013, the claim was filed within one year of realisation.

It set aside the impugned order and allowed the appeal on limitation, with consequential relief in accordance with law.