2018 (6) TMI 796 - AT - Service Tax

Refund claim - Services rendered outside India - Place of Provision of Services Rules - rejection on the ground that since M/s Holtech International has taken registration on 02/07/2015 at Wakad, Pune, hence as per definition of service recipient in Rule 2 (i) of PPS Rules, the location of service recipient is premises for which such registration has been obtained i.e India - Rule 6 A of Service Tax Rules - Held that - The office of M/s Holtech International situated in USA is different establishment from its project office in India - In the present case it is the US establishment of M/s Holtech International, USA who has availed the services from the Appellant and therefore the services rendered by Appellant would clearly fall under the category of Export of Service in terms of Rule 6 A of Service Tax Rules, thereby making them eligible for refund claimed by them - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeals filed against Order-in-Appeal by M/s Holtech Asia Pvt. Ltd. on the ground of refund claims being objected due to service recipient location, leading to denial of export status.

Issue 1 - Service Recipient Location Interpretation:
The dispute revolved around the location of service recipient as per Rule 2 (i) of PPS Rules, impacting the qualification of services as exports. The authorities argued that since the service provider and recipient were both in India post-registration, the services did not meet export criteria under Rule 6A of STA Rules. Appellant contended that services were solely for Holtec International USA, fulfilling export conditions.

Issue 2 - Export Qualification and Refund Eligibility:
Appellant asserted that services provided to Holtec International USA qualified as exports under Rule 6A of Service Tax Rules, citing precedents and payment in foreign exchange. They argued against the impact of Holtec International's India office registration on service qualification, emphasizing RBI regulations and distinct person concept under Section 65B(44).

Issue 3 - Adjudication and Lower Authorities' Findings:
The lower authorities upheld the denial of refund based on the recipient's office in India, rejecting export status due to service location. Respondent reiterated these findings, emphasizing the presence of Holtec International USA's office in India as a determining factor.

Judgment:
The Tribunal analyzed the facts, emphasizing that services were rendered to Holtec International USA, with consideration received in foreign exchange. It differentiated the India office's purpose from the services rendered, concluding that the services qualified as exports under Rule 6A of Service Tax Rules. The Tribunal rejected the lower authorities' interpretation of service recipient location, citing distinct person provisions and setting aside the denial of refund. Consequently, all appeals by the Appellant were allowed with consequential reliefs, if any.