Export of service for technical testing upheld prima facie where report transmission abroad completed the service.

Technical testing and analysis services were treated as a prima facie export of service where testing was done in India but the report was transmitted to and received by an overseas recipient. The applicable export rules required performance partly outside India and receipt of consideration in foreign convertible currency; the latter condition was undisputed. Following prior tribunal reasoning, the service was regarded as completed only on transmission and receipt of the report abroad, supporting the view that it was performed partly outside India. On that basis, a strong prima facie case was made out and complete waiver of pre-deposit with stay of recovery was granted.

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Issues: Whether the services of technical testing and analysis, involving testing in India and transmission of the report abroad, could be treated prima facie as export of service so as to justify waiver of pre-deposit and stay of recovery.

Analysis: The service fell within the Export of Service Rules, 2005. The relevant conditions were that the service should be performed partly outside India and that consideration should be received in foreign convertible currency. There was no dispute about receipt of consideration in foreign convertible currency. On the facts, the testing and analysis were carried out in India, but the service was completed only when the test report was sent and received by the overseas recipient. The reasoning adopted in the earlier tribunal decision relied upon was followed, and the service was treated as one performed partly in India and partly outside India. This established a strong prima facie case that the activity amounted to export of service.

Conclusion: The appellant succeeded in establishing a prima facie case for treating the service as export of service, and complete waiver of pre-deposit with stay of recovery during pendency of the appeal was granted.

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