2014 (7) TMI 451 - AT - Service Tax

Services Provided Outside India Qualify as Exports under Rule 3 (1) (iii)

The tribunal upheld the Commissioner (Appeals)'s decision that services provided outside India qualified as exports under Rule 3 (1) (iii) of the Export ... Denial of Refund claim - Export of Business Auxiliary Service - Revenue contend that as the goods have been marketed in India therefore, the service has been received in India - However, commissioner allowed claim following CBEC Circular No. 111/05/2009 dated 24.02.2009 - Held that:- Telecom service provided in India to International in-bound roamers registered with foreign telecom network operator, payment received from impugned foreign telecom operators in convertible foreign exchange, in that set of facts this Tribunal has held that the service have been provided outside India as an export of service. IN this case, the respondent is in a better footing than in the case of Vodafone Essar Cellular Ltd. (2013 (7) TMI 178 - CESTAT MUMBAI) wherein it was held that the service recipient is the foreign telecom service provider and not the subscriber of the foreign telecom service in India and providing service in India and it is a case of export of service. In the circumstance, I hold that the learned Commissioner (Appeals) has rightly held that the case of export of service as per Rule 3 (1) (iii) of Export of Service Rules, 2005. In the circumstances, I do not find any infirmity with the impugned order and the same is upheld - Decided against Revenue. Issues:- Appeal against the refund claim of service tax paid under Business Auxiliary Service.- Determination of whether services provided outside India qualify as export of service for refund claim.Analysis:The judgment revolves around an appeal regarding the refund claim of service tax paid by the respondent under Business Auxiliary Service. The respondent provided services to principals located outside India by marketing their products in India. The dispute arose when the adjudicating authority rejected the refund claim, asserting that as the goods were marketed in India, the service was deemed received in India. However, the Commissioner (Appeals) allowed the claim based on a CBEC Circular, leading to the Revenue's appeal.The main contention was whether the services provided outside India could be considered as export of service for the purpose of the refund claim. The Revenue argued that since all services were marketed and consumed in India, the refund claim was not valid. Conversely, the respondent contended that the recipient of services was located outside India, and the services were also received outside India, qualifying as an export under Rule 3 (1) (iii) of the Export of Service Rules, 2005.In the analysis, the tribunal referred to a similar case involving Vodafone Essar Cellular Ltd., where services provided in India to international roamers were considered exports. Drawing parallels, the tribunal found that in the present case, the respondent was in a better position than in the Vodafone case. It was established that the service recipient was the foreign telecom service provider, not the subscriber in India, indicating an export of service scenario. Consequently, the tribunal upheld the Commissioner (Appeals)'s decision that the services qualified as exports under Rule 3 (1) (iii) of the Export of Service Rules, 2005, dismissing the Revenue's appeal.