2009 (3) TMI 93 - AT - Service Tax

Appellant is agent of GMC, USA and they procured orders/contracts from Indian Railways for GMC - GMC, USA have no any office of commercial or industrial establishment in India - held that just because commission was received by the Appellant through Indian Railways in Indian Rupees as Indian Railways made payment to GMC in foreign currency after deducting the commission payable to GMC, it cannot be said that the service provided by the Appellant to GMC, USA is not export of service u/r 3(3) of the Export of Service Rules as per Rule 5 ibid, the Appellants were eligible for refund of the service tax paid on such service exported to GMC, USA

Summary

Issues:
Whether the service provided by the Appellant to GMC can be treated as export of service under Export of Services Rules, 2005.

Analysis:
The Appellant, acting as an agent for GMC, procured orders/contracts from Indian Railways and received a commission paid by Railways in Indian rupees. The Appellant claimed a refund of service tax paid, arguing that the services provided to GMC qualify as service exports under Export of Service Rules, 2005. The Asstt. Commissioner rejected the refund claim, stating that receiving commission in non-convertible Indian rupees disqualifies it as an export of service. The Commissioner (Appeals) upheld this decision, leading to the current appeal.

The Appellant contended that the conditions for service export under Rule 3 of Export of Services Rules, 2005 are not applicable as GMC does not have any commercial establishment in India. Citing a previous Tribunal judgment in their favor, the Appellant argued that the services provided to GMC should be considered as service exports. The Departmental Representative relied on a different Tribunal judgment to support the impugned order.

The Tribunal examined the nature of the service provided by the Appellant to GMC and the payment received in Indian currency. It noted that the proviso to sub-rule (3) of Rule 3 applies only if the service recipient has an establishment in India, which was not the case with GMC. Referring to previous judgments, the Tribunal concluded that the service provided by the Appellant to GMC qualifies as an export of service under Rule 3(3) of the Export of Service Rules. Therefore, the Tribunal held that the Appellant is eligible for a refund of the service tax paid on the exported service.

In summary, the Tribunal set aside the impugned order, allowing the appeal and ruling in favor of the Appellant. The judgment emphasized that the service provided to GMC qualifies as an export of service under the relevant rules, entitling the Appellant to a refund of the service tax paid.