Export of services refund upheld where foreign commission was earned in convertible foreign exchange and procedural declaration delays could not bar relief.

Commission agency services rendered for a foreign principal, with commission received in convertible foreign exchange and the benefit accruing outside India, were treated as export of services. On that basis, the service tax paid on the exported service was refundable under the relevant notification read with the Export of Services Rules, 2005. The declaration requirement under the refund notification was held to be procedural only, so delay or non-filing of that formality could not defeat the substantive refund claim. The assessee was therefore entitled to refund, subject to filing the requisite declarations before the adjudicating authority for processing.

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Issues: Whether service tax paid on commission received in convertible foreign exchange for procuring orders for a foreign supplier was eligible for refund as export of services, and whether non-filing or delayed filing of the declaration under the refund notification could defeat the claim.

Analysis: The commission agency activity was rendered for a foreign principal, the commission was received in convertible foreign exchange, and the benefit of the service accrued outside India. On the facts, the service fell within the export of services framework and the tax paid on such export service was refundable under the relevant notification read with the Export of Services Rules, 2005. The requirement of filing the declaration under the notification was held to be procedural, and delay or omission in complying with that formality could not be used to deny the substantive refund benefit.

Conclusion: The refund claim was held to be maintainable and the assessee was entitled to refund of the service tax paid on the commission received from the foreign supplier. The assessee was directed to file the requisite declarations before the adjudicating authority for processing of the refund.

Ratio Decidendi: Where commission in convertible foreign exchange is earned for services whose benefit accrues to a foreign recipient outside India, the service is to be treated as exported, and procedural requirements under the refund notification cannot defeat substantive entitlement to refund.

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