2014 (4) TMI 34 - AT - Service Tax

Scope of the term Export - Money transfer business Location of the consumer - Whether the issue as to what constitutes export of services is to be determined with reference to provisions in Export of service Rules, 2005 only held that - Following decision of Paul Merchant Ltd. vs. CCE, Chandigarh 2012 (12) TMI 424 - CESTAT, DELHI (LB) - Decided in favour of assessee.

Summary

Issues:
1. Whether service tax is chargeable on the service of delivering money provided by the respondent.
2. Whether the service provided by the respondent can be treated as an export of service under the Export of Service Rules, 2005.

Issue 1: Service Tax Liability
The respondent, acting as a sub-agent of M/s Sita World Travels and M/s Reliance Money, facilitated the delivery of money in Indian rupees to beneficiaries in India based on code numbers provided by Western Union (WU). The reimbursement for the amount paid and commission received by the respondent was in convertible foreign exchange from WU. The Jurisdictional Assistant Commissioner confirmed a service tax demand against the respondent, which was appealed to the Commissioner (Appeals) who set aside the order. The Revenue appealed this decision. The Tribunal referred to a previous case, Paul Merchant Ltd. vs. CCE, Chandigarh, where a similar issue was decided in favor of the respondent. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the decision in favor of the respondent regarding the service tax liability.

Issue 2: Export of Service
The respondent argued that since the recipient of their services was WU, a foreign company without a branch in India, their service should be considered as an export of service under the Export of Service Rules, 2005. The Tribunal, after considering the arguments of both parties, found merit in the respondent's position. Citing the case of Paul Merchant Ltd. vs. CCE, Chandigarh, the Tribunal concluded that the service provided by the respondent falls under the category of export of service. Therefore, no service tax could be charged on the service provided by the respondent.

In summary, the Tribunal, comprising Ms. Archana Wadhwa and Shri Rakesh Kumar, addressed two main issues in this judgment. Firstly, it ruled in favor of the respondent, dismissing the Revenue's appeal regarding the service tax liability on money delivery services. Secondly, the Tribunal upheld the respondent's argument that their service qualified as an export of service under the Export of Service Rules, 2005, thereby exempting it from service tax. The decision was influenced by a previous case, Paul Merchant Ltd. vs. CCE, Chandigarh, where a similar issue was resolved in favor of the service provider.