2008 (3) TMI 32 - AT - Service Tax

Appeal allowed; refund of service tax granted as transactions qualify as export of services under Rule 3(2) EoS Rules

M/s. Blue Star Ltd. Versus The Commissioner of Central Excise

CESTAT (AT) allowed the appellant's appeal and directed refund of service tax paid, holding the activities constituted export of services under Rule 3(2), ... Refund of the Service Tax already paid - Export of services in terms of Rule 3(2) of the Export of Services Rules, 2005 - Services to their foreign principals by booking orders in India for their goods - Held that:- I find that the appellants have produced documentary evidence to show that they had rendered the services to their foreign principals by booking orders in India for their goods. I have also perused the details of the refund application. They all relate to the goods supplied by the foreign principals based on the orders booked by the appellant. Moreover, in the Agreement relied on by the Revenue, para 9 relates to the services rendered by the appellant. This para has not been referred to by the Commissioner (Appeals) in his order at all. On the basis of the records, I am convinced that the services rendered have been exported in terms of Rule 3(2) of the Export of Services Rules, 2005. Hence, the appellants are entitled for the refund of the Service Tax already paid. Therefore, I allow the appeal with consequential relief, if any. Issues:Refund claim for service tax paid, export of services, interpretation of Export of Services Rules, 2005, entitlement for refund based on services rendered from India but used outside India, documentary evidence provided by the appellants, agreement between the appellant and the principal, consideration of details in refund application, remand for further details, decision on appeal for refund.Analysis:The appeal was filed against the Order-in-Appeal No. 44/2007-ST dated 31.08.2007 passed by the Commissioner of Central Excise (Appeals-II), Bangalore. The appellants sought a refund of Rs. 9,87,235/- claiming that the services they provided amounted to Export of services under Rule 3(2) of the Export of Services Rules, 2005. The appellants booked orders for their Principal in foreign countries, and after the orders were booked in India, the parties directly communicated with foreign suppliers. Upon export of goods to India by foreign suppliers and receiving payments, a commission was paid to the appellant. The appellant argued that the service provided was Business Auxiliary Service, rendered from India but used outside India, with payment received in convertible foreign exchange, supported by documentary evidence and a Chartered Accountant's Certificate.The Revenue, represented by the learned SDR, pointed out the Agreement between the appellant and the principal, stating that the appellants acted as distributors for various foreign products. The Revenue contended that the services were not exported as they were provided in India, thus not meeting the criteria of Rule 3(2) of the Export of Services Rules, 2005. Additionally, the Revenue claimed that all necessary details were not furnished during the refund claim, suggesting a need for remand.Upon careful consideration, the Hon'ble Member (Technical) found that the appellants had presented documentary evidence demonstrating the services rendered to foreign principals by booking orders in India for their goods. The details in the refund application were related to goods supplied by foreign principals based on orders placed by the appellant. The Agreement referred to by the Revenue highlighted services provided by the appellant, a point overlooked by the Commissioner (Appeals). Based on the records, it was concluded that the services rendered had indeed been exported as per Rule 3(2) of the Export of Services Rules, 2005. Consequently, the appellants were deemed entitled to the refund of the Service Tax already paid, leading to the allowance of the appeal with any consequential relief.