2015 (10) TMI 2540 - AT - Service Tax

100% EOU - Rebate claims - Notification No. 12/2005-ST dated 19/4/2005 - export of Business Auxiliary Services i.e. Call Center Services - service tax paid on input services - non-obtainance of service tax registration prior to export of service - Held that - there is no provision in law that for the purpose of refund of duty/ service tax suffered on input/ input services prior registration is required. The said payment of duty/ service tax on input/ input services is nothing to do with the registration of the recipient of the services therefore registration cannot be made criteria to reject the refund claim. Rebate claim - not followed statutory procedures of prior declaration laid down for export of services under Notification No. 12/2005-ST - Held that - the appellant due to some practical difficulties did not file the said declaration before export of the services however such declaration was filed alongwith the rebate claim. In this fact we are of the view that the declaration was indeed filed before the grant of rebate claim. The Adjudicating authority can very well verify the information containing in the declaration and after satisfying the rebate claim can be sanctioned therefore even though the declaration was not filed prior to the export of the services this cannot be the reason for rejection of the claim particularly when the export of service is not under dispute. Rebate claim - non-submission of agreement - Held that - it is not acceptable ground for rejection of rebate claim for the reason that there is no statutory requirement of agreement between service provider and foreign service recipient so long 100% services of the appellant have been admittedly exported and convertible foreign exchange were remitted by the foreign recipient the export transaction has been completed therefore merely for non-submission of agreement does not debar appellant from rebate claim. Rebate claim - debit note for the input services - whether admissible Cenvatable documents under the Service Tax Rules 1994 or not - Held that - firstly the debit note is also a admissible documents as proof of payment of service tax so long as it contains all the information required under the Rule 9(2) of the CCR 2004. In the case of Pharma Lab Process Equipments P. Ltd Vs. CE Ahmedabad 2009 (4) TMI 142 - CESTAT AHMEDABAD -Cenvat credit was allowed on the strength of debit note therefore debit note has been considered as valid documents. Secondly in the present case in our view it is not the case of Cenvat credit whereas it is a case of rebate of service tax suffered on the input service the only requirement is that to ensure the service tax which is to be rebated has been suffered on the input services. From the debit note it is established that input services has suffered the service tax which has to be given as rebate to the appellant. Rebate claim - no clarity of the recipient of the service - Held that - we are of the view that this observation was made on the basis of non-receipt of invoices. As per the submission of the appellant that all the invoices were submitted and the services till December 2005 were provided to UK and Australia and from January 2006 services were provided to Hutchison. This can be verified from the invoices. Since no verification of the claim was properly carried out by the Adjudicating authority it is premature to make a final view on this aspect. Rebate claim - FIRC of HSBC Bank Hong Kong submitted by the appellant are not with reference to the invoices letters submitted by the appellant. It shows only advance against export of services to be rendered or fund transfer the appellant have not explained this term - Held that - we are of the view that irrespective of any terminology used in the FIRC against invoice raised for the services the said remittance must be considered as payment of service provided by the appellant. Therefore merely because such terminology used in the FIRC it cannot be concluded that this remittance is not related to the export of services unless it is proved that such remittance is from some other transaction which is not the Revenue s case. Therefore we are of the considered view that rebate claims were wrongly rejected on the ground taken in the adjudication order and in impugned order of first appellate authority therefore it is not sustainable. - Appeals disposed of by way of remand

Summary

Issues Involved:
1. Service tax registration prior to export of service.
2. Compliance with statutory procedures of prior declaration for export of services.
3. Exemption of Call Center Services from service tax up to 28/2/2006.
4. Submission of Agreement with the foreign service recipient.
5. Admissibility of debit notes as Cenvatable documents.
6. Submission of invoices for the entire period of the rebate claim.
7. Clarity on the recipient of the services.
8. Discrepancies in Foreign Inward Remittance Certificates (FIRC).
9. Remittance amounts received being less than the total amount of export under the invoices.

Detailed Analysis:

1. Service Tax Registration Prior to Export of Service:
The appellant argued that there is no statutory requirement for obtaining service tax registration to claim a rebate on input services. The Tribunal agreed, citing precedents such as mPortal India Wireless Solutions Pvt Ltd Vs. CST Bangalore and Commissioner of Service Tax, Mumbai-II Vs. J.P. Morgan Services India Pvt Ltd, which held that the absence of registration cannot be grounds for rejecting a refund claim. The Tribunal concluded that the lower authorities erred in rejecting the claim based on registration requirements and set aside this finding.

2. Compliance with Statutory Procedures of Prior Declaration:
The appellant admitted to not filing the prior declaration before exporting services but argued that such declarations were submitted along with the rebate claim. The Tribunal found this acceptable, noting that the declaration was indeed filed before the grant of the rebate claim. The Tribunal emphasized that the adjudicating authority could verify the information in the declaration and that the export of services was not disputed.

3. Exemption of Call Center Services from Service Tax up to 28/2/2006:
The Tribunal noted that government policy aims to ensure that neither input nor output tax should be exported. Despite the exemption of call center services, the service tax paid on input services must be refunded. The Tribunal referenced cases like Dell International Services India P. Ltd. Vs. CCE, Bangalore and Zenta Pvt Ltd. Vs. CCE Mumbai to support the view that input service tax should be refunded even if the output service is exempted.

4. Submission of Agreement with the Foreign Service Recipient:
The Tribunal found that there is no statutory requirement for an agreement between the service provider and the foreign recipient. The essential requirement is that services must be exported and payments received in convertible foreign exchange. The Tribunal ruled that the absence of an agreement should not bar the appellant from claiming a rebate.

5. Admissibility of Debit Notes as Cenvatable Documents:
The Tribunal accepted that debit notes can be admissible documents for proof of payment of service tax, provided they contain all required information under Rule 9(2) of the CCR, 2004. The Tribunal cited Pharma Lab Process Equipments P. Ltd Vs. CE, Ahmedabad to support the validity of debit notes as proof of service tax payment and ruled that the rebate claim should not be rejected on this ground.

6. Submission of Invoices for the Entire Period of the Rebate Claim:
The Tribunal addressed the issue of non-submission of all invoices by noting that the appellant had indeed submitted all necessary invoices. It was suggested that the adjudicating authority verify these documents to confirm the claim.

7. Clarity on the Recipient of the Services:
The Tribunal noted that there was confusion regarding the recipient of services due to non-receipt of invoices. The appellant clarified that services were provided to different entities at different times. The Tribunal instructed the adjudicating authority to verify the invoices to resolve this issue.

8. Discrepancies in Foreign Inward Remittance Certificates (FIRC):
The Tribunal ruled that the terminology used in the FIRC, such as 'advance against export service to be rendered' or 'fund transfer,' should not disqualify the remittance as payment for exported services unless proven otherwise. The Tribunal emphasized that the remittance must be considered as payment for services provided.

9. Remittance Amounts Received Being Less than the Total Amount of Export Under the Invoices:
The Tribunal did not explicitly address this issue in the detailed analysis but implied that all discrepancies and claims should be verified by the adjudicating authority.

Conclusion:
The Tribunal found that the rebate claims were wrongly rejected based on the grounds cited in the adjudication order and the impugned order of the first appellate authority. The Tribunal set aside the impugned orders and remanded the matter to the original adjudicating authority for de novo adjudication, instructing the authority to verify the rebate claims in line with the Tribunal's observations.