2015 (8) TMI 745 - AT - Service Tax

Denial of refund claim - Export of service / software to sister units - Refund of unutilized CENVAT Credit - Adjudicating authority came to a conclusion that the export invoice under which the services are claimed to be exported is not in conformity with the provisions of Rule 4A of Cenvat Credit Rules, 2004 and hence it is not possible to ascertain the exact classification of the services which is said to be exported by them - Held that - Rule 3 of Export of Service Rules, 2005 specifically indicates that the services in relation to taxable services should be specified in clause (105) of Section 65 of the Act and also provides for exclusion. The appellant herein had registered himself with the service tax authorities for provision of export of services under the category of BAS and ITSS. Once an assessee has registered himself as provider of output services, it cannot be disputed by revenue that the appellant had not exported any services which falls within the meaning of Export of Service Rules, 2005. - appellant had registered with Hardware Technology Park and Software Technology Park of the Central Government which is an indicator that they are providing some services which are exported and do not fall under the exclusion clause of Export of Service Rules. Subject invoices indicate number, date, project for which it has been issued, invoice addressed to the recipient of service, either parent/sister concern and indicates project code. The said invoice as has been issued and the annexures to the invoice indicates the project is in respect of a software developed and the purchase order number of the client who has placed the order. In our view the information which has been indicated on the invoice is sufficient to come to a conclusion that the invoice was in respect of the export of software by the appellant to their sister/parent concern, who had given them the order. - appellant has received the payment in foreign exchange on the invoices raised. We find that the lower authorities have incorrectly appreciated the facts and held that the appellant is not eligible for the refund of the amount of unutilized credit. - Decided in favour of assessee.

Summary

Issues:
Refund claim of unutilized CENVAT Credit for services exported under BAS and ITSS categories.

Analysis:
The appellant, registered as a provider of Business Auxiliary Services (BAS) and Information Technology Software Services (ITSS), filed a refund claim for unutilized CENVAT Credit. The adjudicating authority rejected the claim citing non-conformity with Rule 4A of Cenvat Credit Rules, 2004. The first appellate authority upheld this decision, stating the appellant failed to correlate the services exported. The appellant argued that they exported services to their parent/sister units abroad, supported by invoices and foreign exchange remittances. The appellate tribunal analyzed the case, noting the appellant's registration under Hardware Technology Park and Software Technology Park. They disagreed with the lower authorities, emphasizing the appellant's classification and registration for export services. The tribunal found the invoices provided sufficient details to conclude service export, contrary to the authorities' view. They highlighted the government's policy to reduce tax cascading on exported services. Additionally, the tribunal referred to a previous order where a similar refund claim was allowed for the appellant, indicating inconsistency in decisions. Consequently, the tribunal set aside the impugned order, directing lower authorities to re-quantify and sanction the refund amount.

This detailed analysis of the judgment showcases the appellant's challenge regarding the refund claim of unutilized CENVAT Credit for services exported under BAS and ITSS categories. The tribunal's decision highlights the importance of proper classification and registration for export services, emphasizing the need for authorities to accurately assess refund claims based on factual evidence and government policies.