AMD Research & Development Center India Pvt Ltd Vs Commissioner of Central Excise And Service Tax (CESTAT Hyderabad)
Summary: The Customs, Excise and Service Tax Appellate Tribunal, Hyderabad considered the appeal filed by M/s AMD Research & Development Centre India Pvt. Ltd. against the order dated 22.03.2012 of the Commissioner (Appeals), Hyderabad, which had upheld rejection of part of the appellant’s refund claim under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 5/2006-CE (NT). The appellant was engaged in providing Information Technology Software Services exported without payment of Service Tax and had accumulated CENVAT credit on input services during January 2010 to March 2010.
The surviving refund dispute comprised three issues. First, refund of CENVAT credit of Rs. 2,42,39,076/- relating to Service Tax paid under Reverse Charge Mechanism was denied. Second, the refund computation allegedly applied the export turnover ratio to the closing balance instead of the gross eligible CENVAT credit, resulting, according to the appellant, in excess rejection of Rs. 11,16,153/-. Third, refund of Rs. 3,11,450/- relating to two invoices was rejected on procedural grounds.
On the first issue, the appellant submitted that Service Tax under Reverse Charge had been discharged through TR-6 challans in March 2010, well before issuance of the Show Cause Notice, and that credit was rightly availed under Rule 9(1)(e) of the CENVAT Credit Rules. It was argued that Rule 9(1)(bb), relied upon by the Department, was introduced only with effect from 01.04.2011 and therefore did not apply to the January-March 2010 period. It was also submitted that Rule 9(1)(bb) concerned supplementary invoices, bills or challans issued by a provider of output service, whereas the appellant had paid Service Tax itself under Reverse Charge.
