Export of manpower supply service qualified for refund of unutilized Cenvat credit under the service tax export rules.

Services supplied to an overseas recipient were analysed as manpower recruitment or supply service because the appellant provided qualified seafarers and ship or port inspectors for the foreign recipient and acted on behalf of an India-based establishment. On those facts, the recipient was outside India, consideration was received in convertible foreign exchange, and the place of provision was outside India, so the conditions for export under Rule 6A of the Service Tax Rules, 1994 were satisfied. The classification principle applied was that a specific taxable entry prevails over a wider residual entry, and the earlier applicable entry was preferred where two entries could cover the activity. Refund of accumulated Cenvat credit was accordingly admissible under Rule 5 of the Cenvat Credit Rules, 2004 and Notification No. 27/2012-CE (N.T.).

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Issues: Whether the services provided to the overseas recipient were classifiable as Manpower Recruitment or Supply Service and, being rendered to a recipient located outside India for consideration in convertible foreign exchange, constituted export of service so as to entitle the appellant to refund of unutilized Cenvat credit.

Analysis: The agreements showed that the appellant supplied qualified seafarers and ship or port inspectors to the foreign recipient and acted on behalf of an India-based establishment. The service recipient was outside India, consideration was received in convertible foreign exchange, and the place of provision was outside India. On these facts, the conditions for export under Rule 6A of the Service Tax Rules, 1994 were satisfied. The service was held to fall under the specific taxable entry for manpower recruitment or supply service, applying the classification principle that a specific entry prevails over a wider residual entry and that the earlier applicable entry is preferred where two entries may cover the activity. The refund of accumulated credit was therefore held to be admissible under Rule 5 of the Cenvat Credit Rules, 2004 and Notification No. 27/2012-CE (N.T.) dated 18.06.2012.

Conclusion: The classification adopted by the Revenue was not sustained, the services were treated as export, and the appellant was held entitled to refund of unutilized Cenvat credit.

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