2017 (10) TMI 853 - HC - Service Tax

Refund claim - export of services - whether the services akin to that of the Respondent are to be treated as Export of Service as per provisions of the Export of Services Rules, 2005? - Held that - the Export of Service may have taken place in India provided with the benefits of the services accrued outside India - Export of Service has been clearly held to be applicable where the benefit of service has accrued outside India. The Respondent s service i.e. delivering cash in India to the beneficiaries of the foreign principals, although appearing to have been rendered in India, but in true sense the beneficiaries of their services accrued outside India i.e. to foreigners who intended to transfer their money from foreign countries to their beneficiaries in India by utilising the services of Western Financial Services Inc., USA - the Appellate Tribunal is justified in rejecting the Appeal of the Appellant and arrive at the finding that the services rendered by the Respondent would fall under the category of Export of Service and the Respondent is not liable to pay service tax on the same. Appeal dismissed - decided against Revenue.

Summary

Issues:
Challenge to judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal regarding service tax liability for money transfer services provided by the Respondent under the category of "Export of Service."

Analysis:
1. The Appellant challenged the judgment and order passed by the Appellate Tribunal, which upheld the order by the Commissioner of Customs (Appeals) rejecting the Appeal filed by the Appellant. The Respondent provided money transfer services to customers and recipients in India, claiming the service fell under "Export of Service" category. The refund claim was rejected by the Assistant Commissioner, but allowed by the Commissioner (Appeals). The Appellate Tribunal rejected the Appeal, leading to the present challenge.

2. The Appellant argued that the services provided by the Respondent did not fulfill the conditions for "Export of Service" as per the Export of Services Rules, 2005, specifically regarding the location of service usage. The Appellate Tribunal's reliance on a previous judgment was contested, claiming it was challenged and incorrect. The Respondent contended that the benefit of the service accrued outside India, supporting their claim with findings from the Commissioner (Appeals) and previous court judgments.

3. The Court reviewed previous Division Bench judgments favoring the Assessee in similar cases, emphasizing that the benefit of services accruing outside India is crucial for determining "Export of Service." The Respondent's services, although seemingly rendered in India, provided benefits to foreigners intending to transfer money to India, justifying the classification as "Export of Service." The Court upheld the Appellate Tribunal's decision, dismissing the Appeal and ruling in favor of the Respondent.

4. The judgment highlighted that the Appellate Tribunal's reliance on previous cases was justified, as the principle of service benefit accruing outside India was consistent. The Respondent's provision of money transfer services to foreigners, with fees received from abroad, supported the classification as "Export of Service." Consequently, the Court dismissed the Appeal, with no order as to costs.