2015 (5) TMI 176 - AT - Service Tax

Refund claim - export of Advisory services - period of limitation - Held that - In terms of Export of Service Rules, 2005 in respect of financial services, if the service recipient is situated outside India and the consideration has been received in convertible foreign exchange, it would satisfy the definition of export and therefore, in the absence of any dispute relating to the situs of the service recipient and the receipt of consideration in convertible foreign exchange, the contention of the respondent that the transaction is one of exports has to be upheld. Therefore, the lower appellate authority is right in holding that the appellant had, in fact, exported the services and therefore, eligible for the service tax credit paid on the input services. There is also no dispute about the refund being time barred. In the absence of any such reasons, there is no infirmity in the order passed by the lower appellate authority. Accordingly, I find no reason to interfere with the said order. - Decided against assessee.

Summary

Issues:
1. Refund of service tax denied by adjudicating authority
2. Determination of whether the service qualifies as export
3. Consideration received in convertible foreign exchange
4. Applicability of Export of Service Rules, 2005
5. Time-barred refund

Analysis:
The appeals were filed against an Order-in-Appeal by the department where the lower appellate authority allowed the refund of service tax amounting to Rs. 54,84,603, which was initially denied. The dispute centered around whether the services rendered qualified as exports. The Revenue contended that the services were advisory and not eligible for export benefits. However, it was undisputed that the service recipient was abroad and payment was received in convertible foreign exchange.

The respondent argued that since the service recipient was abroad and payment was in foreign exchange, the services satisfied the Export of Service Rules, 2005 criteria for export. The situs of the service recipient was emphasized as crucial in determining the export nature of the service. The appellate authority upheld the refund, stating that the services were indeed exported, making the appellant eligible for the service tax credit on input services.

The Tribunal, after considering both sides, concluded that the services qualified as exports under the Export of Service Rules, 2005, as the service recipient was abroad and payment was received in convertible foreign exchange. The lower appellate authority's decision was upheld, and the revenue's appeal was rejected. The Tribunal found no reason to interfere with the order, as there was no dispute regarding the refund being time-barred. Consequently, the respondent was entitled to any consequential relief in accordance with the law.

In conclusion, the Tribunal dismissed the revenue's appeal, upheld the lower appellate authority's decision, and allowed the respondent's claim for refund based on the services being exported as per the Export of Service Rules, 2005. The early hearing applications were deemed infructuous and dismissed, and the cross objections were disposed of accordingly.