2017 (2) TMI 24 - AT - Service Tax

Refund claim - N/N. 5/2006 dated 14.3.2006 - the appellant has entered into an agreement with the foreign parties in terms of which they were required to give advice on opportunities related to companies incorporated, headquartered or doing business in India - whether the services rendered by the appellant are used outside India? - Held that - the services rendered by the appellant to the foreign service receivers are to be considered as used outside India. However, the Id. DR has pointed out that some of the conditions specified in the notification such as non-submission of relevant documents, the export invoices, use of input service in the export service etc. have not been annexed with original refund application. For this purpose, matter remanded to the original authority - appeal allowed by way of remand.

Summary

Issues involved:
Challenge to the rejection of a refund claim under Notification No. 5/2006 dated 14.3.2006 for Cenvat credit on input services used in providing output services exported. Dispute over whether the services provided by the appellant were used outside India as per the Export of Service Rules, 2005. Verification of conditions specified in the notification and the need for submission of relevant documents.

Detailed analysis:
The appellant filed a refund claim under Notification No. 5/2006 dated 14.3.2006, which was rejected by the adjudicating authority citing various reasons. The main issue was whether the services claimed to have been exported qualified as service under the Export of Services Rules, 2005. The original authority and the Commissioner (Appeals) upheld the rejection, leading to the present appeal challenging the order dated 21.11.2011.

The Tribunal analyzed the conditions specified in Notification No. 5/2006, emphasizing that the exported output service must satisfy the Export of Service Rules, 2005. These rules require that the recipient of the service is located outside India, the services are provided from India and used in business outside India, and payment is received in convertible foreign exchange. The dispute centered around whether the services provided by the appellant were used outside India, despite the recipient being located abroad and payment being received in foreign exchange.

Referring to precedents like Microsoft Corporation India Pvt. Ltd. case, the Tribunal considered similar situations where services provided to foreign recipients were deemed as used outside India. The Tribunal held that the services rendered by the appellant to foreign service receivers should be considered as used outside India, satisfying the conditions of the Export of Service Rules, 2005. However, the Tribunal noted that certain conditions specified in the notification, such as submission of relevant documents and invoices, were not met by the appellant.

As a result, the Tribunal remanded the matter to the original authority for further verification and directed them to pass an order within three months after giving the appellant an opportunity to comply with the necessary conditions. The appeal was disposed of accordingly, based on the findings and precedents discussed during the proceedings.