2017 (5) TMI 887 - AT - Service Tax

Refund claim - promotion and marketing of universities located in India as well as abroad - export of services or not? - rejection of refund claim on the ground that the services provided by the appellant do not qualify as export of services specially when the services were provided and used in India, therefore, they cannot be regarded as export - Held that - mere fact that the appellant has been promoting and marketing foreign universities within India and then getting prospective students enrolled for various courses in those universities does not mean that services to foreign universities were consumed within India - There is no dispute that service recipients are foreign universities and they are located outside India and payment for such services has been received in foreign currency. From the totality of facts and circumstances, there is no doubt that these services were provided from India and used outside India - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund claim by the lower authorities.
2. Determination of whether the appellant's services qualify as export of services.
3. Interpretation of relevant provisions under the Finance Act, 1994.
4. Application of Export of Services Rules, 2005.
5. Consideration of case law precedents regarding export of services.

Analysis:
1. The appellant, engaged in promotion and marketing of universities in India and abroad, filed a refund claim of ?15,66,153.00, which was rejected by the lower authorities on the basis that the services provided did not qualify as export of services, especially when used in India.

2. The Revenue contended that the appellant's activities fell under 'Business Auxiliary Services,' 'Support Services for Business or Commerce,' and 'Commercial Training or Coaching Services' under the Finance Act, 1994. The appellant also claimed a refund of CENVAT credit under notification number 5/2006-CE(NT).

3. Upon review, it was found that the appellant met the conditions of Rule 3(1) of the Export of Services Rules, 2005, as the recipient was located outside India, services were provided from India to outside India, and compensation was received in convertible foreign currency.

4. Citing the case of Microsoft Corporation (I) (p) Ltd Vs Comm. Of S.T., the Tribunal emphasized the principle that services provided to a foreign entity and used outside India constitute export of services, exempt from service tax. The Tribunal also highlighted the equivalence between taxation of goods and services, as per relevant Supreme Court decisions.

5. The Tribunal held that the appellant's services, despite promoting foreign universities within India, were consumed outside India as the service recipients were foreign universities located abroad. Therefore, the services were provided from India and used outside India, meeting the criteria for export of services. Relying on case law precedents, the Tribunal allowed the appeal and granted consequential relief by setting aside the impugned order.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on the interpretation of relevant legal provisions and precedents.