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 of Service Rules, 2005. The appeal against the rejection of the refund claim of service tax paid under Business Auxiliary Service was dismissed, as the services were deemed to have been received outside India, benefiting from the export status.

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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.

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