2023 (11) TMI 471 - AT - Service Tax

Rebate claim - rejection on the ground of time limitation - rejection also on the ground that there is no export of services - HELD THAT - On perusal of the order passed by the Commissioner (Appeals) dated 29/11/2012, it is seen that the Commissioner (Appeals) has considered the issue as to whether the activity of giving investment advices to the client abroad amounts to export of services - The decision to accept the advice rests with the foreign client. The client who is abroad can opt to accept the advice given by appellant or reject the same. In such circumstances, a decision taken by a foreign client to invest in India cannot be said to be the deciding factor whether the advisory services amount to export of service or not. The taxability of an event cannot depend upon a decision taken by a foreign client. The Commissioner (Appeals) has rightly discussed the issue in detail and held that the refund is eligible to the assessee. Though the decision referred by the Commissioner (Appeals) has analysed the issues on the basis of a circular of 2009, we find that the reasoning given by the Commissioner (Appeals) is proper and does not require any interference. The sanction of refund to the assessee is legal and proper. The appeal filed by the department is without merits - Appeal of assessee allowed.

Summary

Issues involved:
The issue involved in this case pertains to whether the activity of providing investment advice to clients abroad amounts to export of services, specifically in the context of claiming a rebate on service tax paid.

Summary:

Issue 1 - Rebate Claim:
The appellant, engaged in managing assets and providing investment advice to clients abroad, filed a rebate claim under Rule 5 of Export of Services Rules 2005. The claim was partly allowed by the original authority, leading to an appeal before the Commissioner (Appeals). The Commissioner allowed the appeal, sanctioning the balance rebate. The department, aggrieved by the sanction of refund, filed an appeal focusing on whether there was an actual export of service.

Issue 2 - Refund Sanctioning Authority's Order:
Following the Commissioner's order, the appellant requested a refund which was sanctioned by the refund authority. The department appealed this decision, resulting in the Commissioner (Appeals) setting aside the refund sanction order. The appellant then filed an appeal challenging this decision.

Commissioner (Appeals) Decision:
The Commissioner (Appeals) had considered the issue of export of services in detail, emphasizing that the decision to accept investment advice ultimately rested with the foreign client. The Commissioner held that the refund was justified, taking into account circulars from both 2009 and 2011. The Tribunal found the reasoning sound and upheld the sanction of refund to the appellant, dismissing the department's appeal.

Conclusion:
The Tribunal sustained the impugned order in the department's appeal, dismissing it. In the appellant's appeal, the impugned order was set aside, allowing the appeal with any consequential reliefs.

This summary provides a detailed overview of the issues involved in the legal judgment, the arguments presented by both parties, and the Tribunal's decision on each issue.