2019 (11) TMI 616 - AT - Service Tax

Refund of service tax - Rule 5 of CCR 2004 - export of services - service of the appellant are classifiable under BAS and being ineligible service, duly exported, the appellant filed refund claim for the period 2008-09 - HELD THAT - Except as provided in the agreement, the appellant have not raised any invoices for after sale service. They have raised invoices for the marketing services rendered, classifiable under BAS and have received commission from the manufacturer located in Japan - Accordingly in terms of the export of service rules, 2005 rule 3 (2) (a) read with Rule 3(2)(b)(ibid), the appellant have satisfied both the conditions, as the receiver of the services is located outside India and have received remittance for the services in convertible foreign exchange. The appellant have exported their services outside India. Accordingly they are entitled to refund under Rule 5 of CCR 2004 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund of service tax under Rule 5 of CCR 2004 rejected by Commissioner (Appeals).

Analysis:
The appellant, providing marketing services as a commission agent to a Japanese manufacturer, filed a refund claim for the period 2008-09, which was partially allowed in the 2nd round of litigation. The Commissioner (Appeals) rejected a portion of the claim, stating that the services provided were not export of service as they were used in India for Indian customers. The appellant contended that they did not provide after-sale services, only communicated complaints to the manufacturer in Japan, supported by a certificate from the manufacturer. The appellant argued that the benefit of the services accrued outside India, relying on CBEC circular and a Bombay High Court ruling.

The Tribunal considered the contentions and found that the appellant did not raise invoices for after-sale services but for marketing services, satisfying the conditions under the export of service rules, 2005. As the services were received by a party outside India and remittance was in convertible foreign exchange, the Tribunal held that the services were exported outside India. Consequently, the appellant was entitled to a refund under Rule 5 of CCR 2004. The Tribunal set aside the order-in-appeal and restored the original order, allowing the appeal with consequential benefits.