2017 (5) TMI 1137 - AT - Central Excise

Tribunal overturns order, grants refund for export services. Appellant directed to fulfill conditions for tax exemption.

M/s National Engineering Industries Ltd. Versus CCE, Jaipur

The impugned order rejecting the refund claim for export of services was set aside by the Tribunal. The appellant's appeal was allowed, directing the ... Refund claim - Business Auxiliary Service - export of services - Held that: - the matter is covered by the Tribunal’s decision in the appellant’s own case M/s National Engineering Industries Ltd. Versus CCE, Jaipur [2017 (5) TMI 750 - CESTAT NEW DELHI], where it was held that the services are considered as export of services and refund allowed on same - the original authority is directed to consider the appellant’s refund claim as admissible in law - appeal allowed by way of remand. Issues:Refund of service tax for export of services rejected.Analysis:The case involved an appeal by M/s National Engineering Industries Ltd. against the rejection of a refund amounting to Rs. 11,11,899 for export of services in the Order-in-Appeal No. 351/2010 dated 27.9.2010. The appellant acted as agents for M/s Electro Motive Diesel (EMD), USA, procuring orders from Indian Railways for EMD under Business Auxiliary Service. The appellant received commission through Indian Railways, claiming the services provided to EMD as export services.During the proceedings, the appellant's counsel argued that since M/s EMD, USA did not have an office in India and the appellant procured orders from Indian Railways for EMD, the service tax charged under Business Auxiliary Service should be considered admissible for refund due to the export of services. The Tribunal referred to its own previous decision in the appellant's case, directing the Revenue to consider the refund claim as per law.Additionally, the Tribunal cited a previous case involving the appellant where it was observed that for the benefit of Rule 4, the assessee must fulfill the conditions of Rule 3(2) of the Export of Services Rules, 2005. The Tribunal agreed with the Revenue's submission that the purpose of Rule 3(2) is to earn convertible foreign exchange to qualify for the exemption of service tax. In this case, it was found that the equivalent amount of foreign exchange payable to the appellant was not released to Indian Railways, leading to the conclusion that the appellant complied with the provision of Rule 3(1)(b) of the Rules.Ultimately, the impugned order rejecting the refund claim was set aside, and the original authority was directed to consider the appellant's refund claim as admissible in law, resulting in the appeal being allowed in favor of the appellant.