2022 (8) TMI 1104 - AT - Service Tax

Business auxiliary service - activity of conducting market research and market survey in India for and on behalf of the foreign principle - Export of service - HELD THAT - The Commissioner (Appeals) was justified in deciding the appeal in pursuance to the order passed by the Tribunal in the earlier round of proceedings on November 16, 2016 on the basis of the five decisions of the Tribunal. The appeal filed by the Department is dismissed.

Summary

Issues:
Appeal against order upholding rebate claim - Determination of 'export of service' in market research activity - Challenge to appellate authority's decision based on pending Supreme Court appeals.

Analysis:
The Department appealed against the Commissioner (Appeals) order upholding the rebate claim of the respondent, originally sanctioned by the Assistant Commissioner. The respondent contended that conducting market research for a foreign principal should be treated as an export of service, not 'business auxiliary service' in India. The Tribunal remanded the matter to the adjudicating authority to reassess based on previous decisions. The authority found the services qualified as export, entitling the party to a refund, not Consumer Welfare Fund credit, within the prescribed limitation period.

The Department challenged this decision before the Commissioner (Appeals), who upheld the adjudicating authority's order. The grounds of appeal focused on the Department's challenge to the reliance on Tribunal decisions, which were under Supreme Court consideration. The Department argued that the appeal should not have been decided due to pending Supreme Court appeals against the Tribunal's orders. However, the respondent's counsel emphasized that the Tribunal's direction to reassess based on its decisions had to be followed, especially since the Department did not challenge the Tribunal's previous order.

The Tribunal found merit in the respondent's argument, stating that the Commissioner (Appeals) was justified in deciding the appeal based on the Tribunal's direction and previous decisions. The mere pendency of appeals before the Supreme Court, without any stay, was not sufficient to halt the proceedings. Consequently, the Department's appeal was dismissed, affirming the decision to uphold the rebate claim for the respondent.