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TMI Blog2013 (2) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... ices of multinational corporations. The appellant’s unit in Okhla is one of those places which are popularly known as “Call Centres” – business process outsourcing (BPO) centres. The mainstay of the call centres is a sophisticated computer system and a technically strong and sophisticated international telephone network. Thus the very bedrock of the business is the attending of calls and given that they are received on a continuous basis, it difficult to conceive of any possibility as to how the appellant could not only determine the date of export but also anticipate the call so that the declaration could be filed “prior” to the date of export. In addition to this practically impossible situation, the appellant is also required by the procedure laid out in the notification to describe, value and specify the amount of service tax and cess payable on input services actually required to be used in providing taxable service to be exported. With the possible exception of the description, unable to appreciate how the service-exporter will be in a position to value and specify the amount of service tax/cess payable on the input services actually required to be used in providing the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce services, customer-care services etc. to its various clients all of whom were situated outside India, i.e., in UK, USA and Australia. 2. The appeal arises out of the order passed by the Central Excise Service Tax Appellate Tribunal ( CESTAT ) in order No. ST/593/2011(PB) on 05.10.2011, in Appeal No. ST/66/2008. On 12.12.2012, the following substantial question of law was framed: - Whether in facts circumstances of present case impugned Final Order No.ST/593/11 dated 05.10.2011 passed by the Appellate Tribunal remanding the case back to the adjudicating authority for de novo adjudication with the direction that Convergys India case (supra) will not be applicable if the Appellant has not filed the declaration under Notification No.12/2005 dated 19.04.2005 or has filed after completion of export is correct in law in as much as the aforesaid direction is based on erroneous interpretation of the decision of Convergys India (supra)? 3. In respect of the services provided by the appellant, it was liable to pay service tax under the relevant provisions of Chapter V of the Finance Act, 1994. The Export of Service Rules, 2005 were framed by notification No.9/2005-ST on 03.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be exported shall, prior to date of export of taxable service, file a declaration with the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, describing the taxable service intended to be exported with,- (a) description, quantity, value, rate of duty and the amount of duty payable on inputs actually required to be used in providing taxable service to be exported; (b) description, value and the amount of service tax and cess payable on input services actually required to be used in providing taxable service to be exported. 3.2 Verification of declaration The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall verify the correctness of the declaration filed prior to such export of taxable service, if necessary, by calling for any relevant information or samples of inputs and if after such verification, the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise is satisfied that there is no likelihood of evasion of duty, or as the case may be, service tax and cess, he may accept the declaration. 3.3 Procuremen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (d) National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001), as amended by section 169 of the Finance Act, 2003 (32 of 2003), section 3 of the Finance Act, 2004 (13 of 2004) and further amended by clause 123 of the Finance Bill, 2005, which clause has the force of law by virtue of the declaration made under the Provisional Collection of Taxes Act, 1931 (16 of 1931); (e) special excise duty collected under a Finance Act; (f) additional duty of excise as levied under section 157 of the Finance Act, 2003 (32 of 2003); (g) Education Cess on excisable goods as levied under section 91 read with section 93 of the Finance (No.2) Act, 2004 (23 of 2004); and (h) the additional duty of excise leviable under clause 85 of the Finance Bill, 2005, which has the force of law by virtue of the declaration made in the said Finance Bill under the Provisional Collection of Taxes Act, 1931 (16 of 1931). It would appear that there is no prescribed form of declaration; however, Form ASTR-2 has been prescribed in the notification and the application for fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an estimate in the declaration required to be filed prior to the date of the export. The appellant also pointed out in the replies that the requirement of filing the declaration prior to the date of the export of the services was a procedural requirement which could not be complied with due to practical difficulties and even if it was to be complied with as a ritual, the figures which the appellant could give therein would only be estimates which would not serve the purpose and object of the requirement which would be better achieved by verifying/scrutinising the actual figures given in the rebate claim forms with the documentary evidence that would then be available. It was submitted that since there was substantial compliance with the law and no fault or irregularity having been found in the details furnished in the rebate claims, the rejection of the rebate claims would not be justified. 6. The above submissions of the appellant did not find favour with the Deputy Commissioner, Service Tax, Delhi-II. He passed separate orders- in-original in respect of the two claims on 28.02.2007. He held that since the appellant had not followed the procedure prescribed for obtaining the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be applicable and in that case, the delay would be condonable. If however the declaration under para 3.1 had not been filed at all or had been filed after the completion of export of service for which rebate had been claimed, and thereby depriving the sanctioning authority of the opportunity to verify the correctness of the declaration and satisfy himself that there is no possibility of evasion of duty by misuse of this facility, the requirement of paras 3.1 3.2 cannot be said to have been satisfied and the rebate would not be admissible. The impugned order is, therefore, set aside and the matter is remanded to the original adjudicating authority for de novo adjudication of the matter in terms of our above directions. The appeal is disposed off by way of remand. Towards the end of the earlier paragraph, though, the Tribunal had expressed a clear opinion that The condition prescribed in para 3.1 is for the purpose of preventing the evasion of duty by misuse of this facility and, therefore, if this condition, though a procedural condition, is violated, the rebate would not be admissible . 9. The question for consideration is whether the filing of the declaration in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices of the MNCs, queries relating to maintenance and after-sales services, providing telephonic assistance in case of glitches during operating the consumer-products or while utilising the services and so on. For instance, the customer sitting in USA has a problem operating a washing machine sold to him by an American company. When he calls the company, the local telephone number would be linked to the call centre number in India and it will actually be an employee of the Indian call centre who would answer the queries and assist the customer in USA get over the problem. Another example could be of a person in USA wanting to book an international air-ticket from an airline; his queries over the phone will be answered by the employee of the Indian call centre, sitting in some place in India. The American manufacturer of the washing machine or the American airline company is the source of revenue for the Indian call centre or BPO centre. 11. Apart from the telephone and computer network, every call centre requires an employee-strength to attend to the calls. First they have to be recruited and then they have to be trained in following and speaking in different accents peculiar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how the appellant could not only determine the date of export but also anticipate the call so that the declaration could be filed prior to the date of export. In addition to this practically impossible situation, the appellant is also required by the procedure laid out in paragraph 3 of the notification to describe, value and specify the amount of service tax and cess payable on input services actually required to be used in providing taxable service to be exported. With the possible exception of the description, we are unable to appreciate how the service-exporter will be in a position to value and specify the amount of service tax/cess payable on the input services actually required to be used in providing the exported service. An estimate is ruled out by the use of the word actually required ; and unless what was actually required is known, it is impossible to value and specify the amount of service tax or cess payable on the input services. That will be known only when the bill or invoice for the input-services is received by the appellant. The bill or invoice is received after the calls are attended to. Thus, it seems to us that in the very nature of things, and conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f compliance with the requirement. If, having regard to the nature of the business and its peculiar features which are not in dispute the description, value and the amount of service tax and cess payable on input-services actually required to be used in providing the taxable service to be exported are not determinable prior to the date of export but are determinable only after the export and if, further, such particulars are furnished to the service tax authorities within a reasonable time along with the necessary documentary evidence so that their accuracy and genuineness may be examined, and if those particulars are not found to be incorrect or false or unauthenticated or unsupported by documentary evidence, we do not really see how it can be said that the object and purpose of the requirement stand frustrated. In the present case, no irregularity or inaccuracy or falsity in the figures furnished by the appellant both on 05.02.2007 and in the rebate claims has been alleged. Moreover, it appears to us somewhat strange that none of the authorities below has demonstrated as to how the appellant could have complied with the requirement prior to the date of the export of the IT-en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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