2015 (11) TMI 226 - AT - Service Tax

Refund - Unutilized CENVAT Credit - Export of service or not - research and analysis regarding investment was carried out in India but that services are provided to US based entity and the recipient is a US based entity - Held that - Services were carried out in India but the recipient is outside India and, therefore, the services provided by Indian entity deemed to be used by the person located outside India and, therefore, it satisfies the terms used outside India as provided under the Export of Service Rules. Therefore, following the ratio of the above judgments and coupled with facts of this case, it is absolutely undisputed that the appellant has provided the services from India and the same was used outside India. Accordingly it qualifies as export of services and refund is admissible. - original sanctioning authority has rightly sanctioned the refund claim holding that the services provided by the appellant is export of services. Hence the impugned order passed by the Commissioner (Appeals) is not sustainable and the same is set aside - Decided in favour of assessee.

Summary

Issues:
- Whether services provided by the appellant qualify as export of service for refund eligibility.

Analysis:
The appellant, a consultancy firm, provided services to a US-based entity, M/s. Apollo Management VII L.P., under an Investment Advisory Agreement. The appellant claimed a refund for input services under Rule 5 of CENVAT Credit Rules, 2004. The adjudicating authority rejected a portion of the refund claim, which was challenged by the Revenue in an appeal before the Commissioner (Appeals). The Commissioner rejected the order-in-original, leading to the appellant's appeal before the Appellate Tribunal.

The appellant argued that since the services were provided to a US-based entity and used outside India, they qualified as export of services. The appellant cited precedents such as the Amba Research case and the Greater Pacific Capital case to support their claim. The Revenue, represented by the Asstt. Commissioner, reiterated the findings of the impugned order.

The Tribunal, after considering the submissions, analyzed the nature of services provided by the appellant to M/s. Apollo Management VII L.P. It was established that the services, though related to analysis conducted in India, were consumed by the US-based entity for providing services to other foreign companies. The Tribunal noted that the services were not provided to any person in India and were used outside India, thus meeting the criteria for export of services.

Referring to the judgments in the Amba Research case and the Greater Pacific Capital case, the Tribunal found that the services being carried out in India but consumed by a recipient outside India qualified as export of services. Consequently, the Tribunal held that the services provided by the appellant were indeed export of services, making them eligible for a refund. The impugned order by the Commissioner (Appeals) was set aside, and the appeal of the appellant was allowed.