Export of service treatment upheld for advisory services to a foreign recipient, defeating service tax demand and penalty.

Services rendered to a recipient outside India, with consideration received in convertible foreign exchange, were treated as export of service and not liable to service tax under the alleged management consultancy classification. The services were advisory in nature and fell within the relevant CBEC circular on export of service. On that basis, the tax demand and penalty were unsustainable, and the revenue appeal failed.

---

---

Issues: Whether the services rendered to a recipient located outside India and received in convertible foreign exchange qualified as export of service and were therefore not liable to service tax under the alleged management consultancy classification.

Analysis: The services were provided to a foreign recipient located outside India, and the consideration was received in convertible foreign exchange. The services were found to be advisory in nature and covered by the relevant CBEC circular on export of service. On these facts, the demand and penalty could not be sustained.

Conclusion: The services were treated as export of service, the tax demand and penalty were unsustainable, and the revenue appeal failed.

---