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2017 (6) TMI 51 - AT - Service TaxRefund of unutilized cenvat credit - export of services - Business Auxiliary Services - identifying potential clients gathering market data identifying potential markets providing analysis of competitive positions etc. - Rule 3(2) of Export of Service Rules 2005 - Held that - the issue is squarely covered in favour of the assessee in the case of M/s. Microsoft Corporation (I) (P) Ltd. Versus CST. New Delhi 2014 (10) TMI 200 - CESTAT NEW DELHI (LB) where it was held that services provided by the agents and some agencies being delivery of money to the intended beneficiary of the customer of the western units abroad which may be located in India and the services provided being business auxiliary services is also to the western unit who is recipient of services and consumers of services it has to be held that services were being exported in terms of Export of Services Rule 2005 and not liable to Service Tax - the service is held as Export of Service - appeal dismissed - decided against Revenue.
Issues:
- Whether the service provided by the respondent constitutes export of services under BAS. - Whether the conditions under Rule 3(2) of Export of Service Rules, 2005 are satisfied for considering the service as export. - Whether the impugned order holding BAS as export of service is legally sustainable. Analysis: Issue 1: Export of Services under BAS The respondent filed refund claims under Notification No. 5/2006-CE for unutilized cenvat credit on input services used for export of taxable services. The Commissioner (Appeals) held that BAS by the respondent constitutes export of service based on judicial pronouncements. The activities under BAS included identifying potential clients, market data analysis, and competitive position analysis. The Commissioner relied on cases like Blue Star Ltd. v. CCE, Bangalore and ABS Ltd. v. CCE, Bangalore to support the decision. Issue 2: Rule 3(2) of Export of Service Rules, 2005 The Department argued that the service provided by the respondent did not meet the conditions under Rule 3(2) as the services were rendered and used in India. They emphasized that receiving consideration in foreign currency alone does not determine the nature of taxable services. The Department contended that no part of the taxable activity was carried out of India, failing to satisfy the Export of Service Rules. Issue 3: Legal Sustainability of Impugned Order The counsel for the respondent defended the impugned order, highlighting that the service was rightly considered as export of service. They argued that the lower authorities incorrectly concluded that the service was delivered and utilized in India. The counsel cited various case laws and the Tribunal's decision in similar circumstances to support their stance. The Tribunal, after considering the submissions and judgments, found in favor of the respondent, upholding the impugned order and dismissing the Department's appeals. In conclusion, the Tribunal upheld the impugned order, stating that the issue was squarely covered in favor of the respondent by the cited judgments. The Tribunal found no infirmity in the Commissioner (Appeals) decision regarding BAS as export of service. Consequently, all three appeals of the Department were dismissed.
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