2023 (9) TMI 719 - AT - Service Tax

Refund of Service Tax - export of service - appellant performed like a commission agent and the appellant s job was to seek or procure sales orders for products manufactured by steel mills outside India for customers in India - rejection of claim of refund stating that services were not used outside India - HELD THAT - The Larger Bench through Interim Order No. 26/2023 dated 09.06.2023 2023 (8) TMI 107 - CESTAT MUMBAI in very clear terms has held that in the present proceedings, the activity of the appellant is export of service. The impugned order set aside - appeal allowed.

Summary

Issues involved: Determination of the scope of phrases in Export of Services Rules, 2005 and qualification of services as Export of Service.

Comprehensive details:

1. Background: The appellant, a subsidiary of a foreign company, acted as a commission agent to procure sales orders for products manufactured outside India for customers in India. The appellant received commission in convertible foreign exchange, believing it to be an export of service and thus not liable for service tax.

2. Reference to Larger Bench: The Tribunal referred four questions of law to the Larger Bench regarding the interpretation of phrases in the Export of Services Rules, 2005, and whether services rendered to a foreign entity for business development in India qualify as Export of Service.

3. Larger Bench Decision: The Larger Bench determined that the services provided by the appellant, including Business Auxiliary Services (BAS), met the requirements of the Export Rules both before and after 01.03.2007. The appellant's activities were considered as export of service under Rule 3 of the 2005 Export Rules.

4. Appellant's Argument: The appellant contended that the services provided were export of service as per the requirements of Rule 3 of the Export of Service Rules, 2005, despite the customers being from India. The appellant relied on the decision of the Larger Bench to support their claim.

5. Revenue's Submission: The Revenue agreed to abide by the decision of the Larger Bench in this matter.

6. Tribunal Decision: After reviewing the case record and the decision of the Larger Bench, the Tribunal concluded that the appellant's activity indeed qualified as export of service. Consequently, the impugned order was set aside, and the appeal was allowed, granting the appellant consequential relief.

This judgment clarifies the scope of phrases in the Export of Services Rules, 2005 and affirms the qualification of the appellant's services as Export of Service based on the decision of the Larger Bench.