2011 (1) TMI 844 - AT - Service Tax

Export of services - It is the claim of the learned counsel that the entire amount which has been received as commission is in convertible foreign exchange - the issue needs to be appreciated on the factual matrix, as to whether the appellant has received the amount of commission from M/s. UAE Exchange Centre, LLC, Abu Dhabi and M/s. UAE and Money Gram Payment System Inc. USA - Since the evidence of the amount so received in foreign exchange was not produced before the Adjudicating Authority, the Adjudicating Authority came to a conclusion that this service is not export of services - Appeal is allowed by way of remand

Summary

Issues:
1. Stay petition for waiver of pre-deposit of service tax, interest, penalties under various sections of the Finance Act, 1994.
2. Determination of whether the amount received as commission for money transfers is in convertible foreign exchange and qualifies as 'Export of Services'.

Analysis:
1. The Tribunal heard arguments on the stay petition for waiver of pre-deposit of significant amounts related to service tax, interest, and penalties under different sections of the Finance Act, 1994. After considering the submissions, the Tribunal decided to dispose of the appeal itself due to the narrow scope of the issue. The application for waiver of pre-deposit was allowed, and the appeal was taken up for disposal.

2. The main issue in this case revolved around the nature of the amount received as commission for money transfers by the appellant. The appellant claimed that the entire commission amount was in convertible foreign exchange, supported by evidence of foreign inward remittance certificates. The Tribunal noted that a similar issue had been addressed in a previous judgment involving Muthoot Fincorp Ltd. vs. CCE, Visakhapatnam. The JCDR contested this claim, arguing that the services provided were in India and did not constitute 'Export of Services', citing a judgment related to M/s. Microsoft Corpn. (I) Pvt. Ltd. vs. CST, New Delhi.

3. Upon careful consideration of the arguments presented, the Tribunal emphasized the need to evaluate whether the commission amount was indeed received in foreign exchange from specific service providers. It was observed that the evidence of foreign exchange receipts was not initially presented before the Adjudicating Authority, leading to a conclusion against the export of services. However, as evidence was now produced before the Tribunal, the matter was deemed to require reevaluation by the Adjudicating Authority based on the factual matrix. Therefore, without expressing any opinion on the case's merits, the Tribunal remitted the matter back to the Adjudicating Authority for a fresh assessment following the principles of natural justice. The impugned order was set aside, and the appeal was allowed by way of remand, with the stay petition also being disposed of.