2019 (2) TMI 1402 - AT - Service Tax

Refund of CENVAT Credit - export of services - refund rejected by the Commissioner (Appeals) on the ground that services provided by the appellant are not management consultant service and services provided by appellant does not qualify as export - whether services provided by appellant are classifiable under management consultant service or not? Held that - It is clear that any service provided by management or business consultant in connection with management of any organization in any manner will be covered under management consultant service. From the scope of services, it is clear that appellant provides information on upcoming projects or potential collaborations of interest to its parent company. Appellant provides the updates and information about the government policies, economic scenario, political climate and industry analysis in India to its parent company. Appellant also provides information about vendors and other procurement related services. Appellant also provides services in relation to recruitment of employees. The said services are used by the parent company to explore the business opportunities in India. The said services provided by appellant are related to management of business of parent company in India and for HR management. The said services are used by parent company to take decisions about the business opportunities in India - Since services in question are related to business management the said services are clearly covered under the definition of management and business consultant service . Whether services provided by appellant qualifies as export or not? - Held that - From the facts of the present case it is evident that services recipient i.e. parent company is located outside India. Further service provided by appellant are used by its parent company outside India to take decisions and payment are received by appellant in foreign currency. Since all conditions of export of service are satisfied, services provided by appellant qualifies as export. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Classification of services under management consultant service and qualification of services as export of service.

Analysis:
1. The appellant, an Indian subsidiary of a UK company, provided services to its parent company in the UK related to exploring business opportunities in India, preparing reports, and HR support. The appellant classified these services under management consultant service.
2. The appellant sought a refund of Cenvat credit under Rule 5 of Cenvat Credit Rules, 2004, but the claims were rejected by the Commissioner (Appeals) on the grounds that the services provided did not qualify as management consultant services or exports.
3. The appellant argued that the services were covered under management consultant services and qualified as exports, citing relevant decisions and circulars. The Departmental Representative disagreed with this classification.
4. The issue before the Tribunal was to determine whether the services provided by the appellant fell under management consultant services and if they qualified as exports.
5. The Tribunal analyzed the definitions of taxable service and management or business consultant under the Finance Act, 1994. It found that the services provided by the appellant, as per the scope of work agreement, clearly fell under management consultant services as they were related to business management and HR support for the parent company.
6. The Tribunal also examined the criteria for qualifying as an export of service under the Export of Service Rules, 2005. It noted that the services were used by the parent company outside India, and all conditions for export were met, including payment in foreign currency.
7. Referring to relevant case laws, the Tribunal concluded that the services provided by the appellant were indeed management consultant services and qualified as exports.
8. Therefore, the Tribunal set aside the orders of the Commissioner (Appeals) and allowed the appeals, directing the Adjudicating Authority to disburse the refund within 60 days with interest.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, relevant legal provisions, and the Tribunal's decision based on the facts and law presented before it.