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TMI Blog2022 (8) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ices provided under Section 66D of the 1994 Act. Thus, it cannot but be concluded that the said exclusionary provision i.e., Subrule (2) of Rule 2(p) of the 2004 rules, is not applicable to the assessee, as in respect of legal service exported by it, service tax is not paid by the recipient of service. The recipient of service is located outside the taxable territory and therefore, this provision can only apply to legal services offered by the assessee to the recipient of service located within the taxable territory. Clearly, the definition of exempted service excludes services which are exported in terms of Rule 6A of the 1994 Rules - the questions of law framed hereinabove are answered in favour of the assessee and against the revenue - the appeal filed by the revenue is dismissed. - SERTA 9/2022 - - - Dated:- 1-8-2022 - HON'BLE MR JUSTICE RAJIV SHAKDHER AND HON'BLE MS JUSTICE TARA VITASTA GANJU Appellant Through: Mr. Akshay Amritanshu with Mr. Pratik Samajpati and Mr. Ashutosh Jain, Advs. Respondent Through: Mr. J. K. Mittal with Ms. Vandana Mittal and Ms. Aashna Suri, Advs. [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for all. 5.1. Accordingly, the appeal is admitted and the questions of law as proposed are taken up for consideration, with the consent of the learned counsel for the parties. 6. The short issue which arises for consideration is whether the assessee is entitled to a refund of unutilized CENVAT credit. The assessee seeks a refund of unutilized CENVAT credit under the CENVAT Credit Rules, 2004 [hereafter referred to as the 2004 Rules ]. 7. Before we proceed further, the following broad facts are required to be noted. 7.1. The assessee is a firm of legal practitioners, which renders legal services to its clients both in India, as well as outside India. 7.2. Pertinently, the assessee specializes in rendering services in the field of intellectual property rights and as per a finding of fact returned by the Tribunal, 75-80% of its receipts are from export of legal services. 7.3. The assessee has, thus, for the periods mentioned hereinabove, sought a refund of unutilized CENVAT credit on account of the export of legal services under Rule 5 of the 2004 Rules. 8. The record shows that insofar as the period covered by the first set of appeals [which, as noticed above, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itanshu, i.e., Rule 2(p) and Rule 5 of the 2004 Rules, to emphasize the point that what was excluded from the definition of output services , was that part where the service provider was located within the taxable territory and the service tax was paid by the recipient (on reverse charge basis), who, like the service provider, is also located within the taxable territory. 14.1. In support of this plea, reference was also made to Section 68(2) of 1994 Act, Rule 2(1)(d)(i)(D)(II) of the Service Tax Rules, 1994 [in short, 1994 Rules ] and Notification No. 30/2012-Service Tax, dated 20.06.2012 issued by the Government of India, Ministry of Finance, Department of Revenue in the exercise of powers under Section 68(2) of the 1994 Act, along with the table appended thereto, in particular, the entry made against serial no.5. 15. Having heard the counsel for the parties and perused the record, we are of the view that the Tribunal has reached the correct conclusion. 16. It is to be borne in mind that there is no dispute that the assessee is exporting legal consultancy services outside the taxable territory. It is also not disputed (something that we have noticed right at the beginn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxx xxx xxx (B) an individual advocate or a firm of advocates by way of support services, or xxx xxx xxx (B) provided or agreed to be provided by any person which is located in a non-taxable territory and received by any person located in the taxable territory; (II) The extent of service tax payable thereon by the person who provides the service and the person who receives the taxable services specified in (I) shall be as specified in the following Table, namely:- Table Sl.No. Description of a service Percentage of service tax payable by the person providing service Percentage of service tax payable by the person receiving the service. 5 in respect of services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services. Nil 100% [Emphasis is ours] 18. Alongside the issuance of the said notification dated 20.06.2012, an amendment was also made in the 1994 Rules, in particular to Rule 2(1)(d)(i)(D)(II). For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Insofar as the last attribute is concerned, over which the entire dispute centers, it cannot but be concluded that the said exclusionary provision i.e., Subrule (2) of Rule 2(p) of the 2004 rules, is not applicable to the assessee, as in respect of legal service exported by it, service tax is not paid by the recipient of service. The recipient of service is located outside the taxable territory and therefore, this provision can only apply to legal services offered by the assessee to the recipient of service located within the taxable territory. 21. This brings us to Rule 5 of the 2004 Rules. For the sake of convenience, the said Rule is extracted hereafter: Rule 5 - Refund of CENVAT Credit (1) A manufacturer who clears a final product or an intermediate product for export without payment of duty under bond or letter of undertaking, or a service provider who provides an output service which is exported without payment of service tax shall be allowed refund of CENVAT credit as determined by the following formula subject to procedure, safeguards, conditions and limitations, as may be specified by the Board [Emphasis is ours.] 21.1. A plain reading of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: Rule 2. In these rules, unless the context otherwise requires- xxx xxx xxx (e) exempted service means a (1) taxable service which is exempt from the whole of the service tax leviable thereon; or (2) service, on which no service tax is leviable under section 66B of the Finance Act; or (3) taxable service whose part of value is exempted on the condition that no credit of inputs and input services, used for providing such taxable service, shall be taken; [But shall not include a service which is exported in terms of Rule 6A of the Service Tax Rules, 1994.] 3 22.3. Clearly, the definition of exempted service excludes services which are exported in terms of Rule 6A 4 of the 1994 Rules. 23. Therefore, for the foregoing reasons and what is indicated hereinabove, we are in agreement with the conclusion reached by the Tribunal. 24. The questions of law framed hereinabove are answered in favour of the assessee and against the revenue. 25. Consequently, the appeal filed by the revenue is dismissed. ------------------- Notes: 1. Prior to Service Tax (Fourth Amendment) Rules, 2016 vide notification No. 33 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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