2015 (6) TMI 956 - AT - Service Tax

Refund / Rebate claim of tax - Export of services or not - activity of procurement of orders from buyers in India for suppliers of goods situated abroad - whether beneficiary of the entire activity is an Indian consumer - held that - Service provided by the respondent is limited to procurement of orders which are sent to the principal entity abroad. Thereafter the role of the respondent ends in as much he is nowhere connected with the actual sale of the goods by the entity abroad to the customers in India. Rule 3(1)(iii)of the Export of Service Rules, 2005 comes into picture as the service concerned is Business Auxiliary Service and the export is deemed to have taken place if the beneficiary is abroad and the payment is received in foreign exchange in India. These two conditions being satisfied, I hold the service to be export of service. - Reliance is placed on the case of Microsoft Corpn. (I) P. Ltd. 2014 (10) TMI 200 - CESTAT NEW DELHI (LB) as well as the case of Paul Merchant 2012 (12) TMI 424 - CESTAT, DELHI (LB) . - decided against Revenue.

Summary

Issues:
1. Whether the service provided by the respondent qualifies as an export of service for claiming a rebate on tax paid on input services.
2. Whether the rebate claim is time-barred.

Analysis:

1. The appeal revolved around the service provided by the respondent, acting as an agent for a foreign entity, in procuring orders from customers in India for industrial pipes manufactured by the foreign entity. The Adjudicating Authority initially rejected the rebate claim, arguing that since the ultimate beneficiary was an Indian consumer, the service could not be considered as an export of service. However, the Commissioner (Appeals) overturned this decision, emphasizing that the beneficiary of the service was the foreign company. The Tribunal agreed with the Commissioner, stating that the service provided by the respondent was limited to order procurement, and the actual sale of goods to Indian customers was handled by the foreign entity. Citing relevant rules and precedents, the Tribunal concluded that the service qualified as an export of service, meeting the necessary conditions under the Export of Service Rules, 2005.

2. The issue of the rebate claim being time-barred was raised by the appellant, arguing that the claim was filed beyond the stipulated time limit. However, the Tribunal noted that this issue was not raised in the initial orders or the grounds of appeal. Consequently, the Tribunal rejected this argument, stating that the time limitation plea was not accepted at that stage. Therefore, the appeal was dismissed, with the respondent entitled to consequential benefits as per the law.

This judgment clarifies the criteria for determining export of services and emphasizes the importance of meeting the conditions specified under relevant rules. It also highlights the significance of raising all relevant issues at the appropriate stages of the legal process to ensure their consideration and addresses them effectively.