Appellant meets export rules, remittance in foreign exchange approved. Eligible costs for services, partial remand for correlation review.

The tribunal held that the appellant satisfied the conditions under Rule 3(2) of the Export of Service Rules, 2005, as the services were exported and utilized outside India, and remuneration was received in convertible foreign exchange. The remittance was found to be in order and received in foreign currency. The tribunal remanded the matter to examine the correlation of export invoices with FIRC. Costs for Rent-a-Cab service and life insurance for staff were deemed eligible as input services. The tribunal allowed the appeals, except for one partially remanded for further review on correlation issues.

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Issues Involved:
1. Whether the service exported is used outside India as required under Rule 3(2) of the Export of Service Rules, 2005.
2. Whether the consideration for service exported has been received in convertible foreign exchange.
3. Correlation between export invoices and FIRC.
4. Allowability of Rent-a-Cab service and life insurance for staff as input service.
5. Whether receipt (foreign remittance) can be claimed based on service provided during the refund period, although invoice was raised after the quarter.
6. Justification of rejection of refund on the ground of export invoices for service raised for the previous quarter in the next quarter, leading to a double claim.

Detailed Analysis:

1. Whether the service exported is used outside India:
The appellant argued that the services provided from India, such as preparing reports and sending them to a client in Mauritius, were used outside India as required by Rule 3(2) of the Export of Service Rules, 2005. The reports were utilized by the foreign client for making investment decisions abroad. The tribunal held that as the reports were exported and utilized outside India, and the remuneration was received in convertible foreign exchange, the appellant satisfied the conditions under Rule 3(2)(a) & (b). Thus, it was deemed an export of service.

2. Whether the consideration for service exported has been received in convertible foreign exchange:
The adjudicating authority initially observed that the export proceeds were received in Indian Currency. However, the appellant provided evidence that the remittance was received in foreign currency and converted into INR by the bank as per RBI guidelines. The tribunal held that the remittance was in order and received in convertible foreign exchange.

3. Correlation between export invoices and FIRC:
The impugned order noted a lack of correlation between export invoices and FIRC, suggesting no remittance against the export invoices. The appellant explained that payments were received after raising invoices and sometimes as advances, and all transactions were recorded in the books of account. The tribunal remanded the matter to the adjudicating authority to examine the correlation of bills with FIRC, directing that if remittance for the bills raised was found, the refund claim should not be rejected.

4. Allowability of Rent-a-Cab service and life insurance for staff as input service:
The impugned order disallowed these services, considering them welfare activities unrelated to the export of services. The appellant argued that these expenses were part of the business cost and included in the operating expenses billed to the client. The tribunal held that the costs incurred for car hire rental and insurance premium for staff were part of the cost for which bills were raised and remittance received, thus eligible as input service.

5. Whether receipt (foreign remittance) can be claimed based on service provided during the refund period, although invoice was raised after the quarter:
The impugned order rejected the refund claim for services provided during the refund period but invoiced later. The appellant explained that invoices were regularly raised, and the scheme of refund did not mandate the claim period to match the billing period. The tribunal held that the Commissioner (Appeals) erred in requiring one-to-one correlation and decided in favor of the appellant, noting that all output services were exported to a single client.

6. Justification of rejection of refund on the ground of export invoices for service raised for the previous quarter in the next quarter:
The impugned order rejected the refund claim, suggesting a double claim for the same invoice. The appellant clarified that no simultaneous refund and rebate were claimed for the same invoices. The tribunal held that there was no simultaneous claiming of refund and rebate for the same invoices, deciding this ground in favor of the appellant.

Conclusion:
The appeals were allowed, with the exception of Appeal No. ST/818/12, which was partially remanded for the limited issue of correlation of output invoices with remittance received. The appellant was directed to appear before the adjudicating authority with relevant documents for reconciliation. The rest of the appeals were allowed with consequential relief in accordance with the law.

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