2021 (2) TMI 399 - AT - Service Tax

Exported services qualify for Service Tax rebate, Tribunal rules lack of privity with foreign client's customers.

The Tribunal upheld rebate claims for Service Tax paid on exported services, ruling that the services provided to a foreign client qualified as export of ... Rebate of Service tax paid - services exported between December, 2008 to March, 2009 and June, 2008 to March, 2009 - privity of contract - argument of Revenue is that although the client is located abroad and services are being paid for in foreign currency, the actual service is being rendered in India, therefore, this does not qualify as export of service and no rebate is available - HELD THAT:- This issue is no longer res integra as this Bench had in respect of the same assessee, in M/S. SAMSUNG INDIA ELECTRONICS P. LTD VERSUS CCE. NOIDA [2015 (1) TMI 1098 - CESTAT NEW DELHI] where it was held that such services qualify as export of services. Revenue’s argument is that they have filed an SLP against this order of the Tribunal and, therefore, it should not have been followed by the Commissioner (Appeals) in the impugned order. There are nothing on record that the order of this Tribunal has either been stayed or set aside by the Hon’ble Supreme Court or any High Court and, therefore, the ratio holds good - Therefore, Commissioner (Appeals) has correctly followed the ratio and held that rebate is admissible on the export of service. Appeal dismissed - decided against Revenue. Issues:1. Whether the services provided qualify as export of services under Notification No. 11/2005-ST dated April 19, 2005.2. Whether the impugned order correctly followed the decision of the Hon'ble CESTAT in the respondent's matter pending before the Supreme Court.Analysis:1. The appeals arose from an order rejecting rebate claims for Service Tax paid on exported services. The Original Authority initially rejected the claims, but the Commissioner (Appeals) remanded the matter. Subsequently, the Original Authority again rejected the claims, stating the services did not meet export conditions. The Commissioner (Appeals) reversed this decision, relying on a previous Tribunal order. The Revenue contended that the services were consumed in India, not exported, citing Rule 6A of Service Tax Rules, 1994 and Rule 3 of Export of Services Rules, 2005.2. The respondent argued that the services were provided on behalf of a foreign client, M/s. SEC, and were paid for in foreign currency. They contended that the services qualified as export of services, citing precedents and the definition of Business Auxiliary Services. The Tribunal noted that a previous order had held similar services as export, emphasizing the lack of privity between the respondent and M/s. SEC's customers. The Tribunal found the issue settled and upheld the rebate claims, rejecting the Revenue's appeals.3. The Tribunal emphasized that the services were rendered for M/s. SEC, who paid in foreign currency, qualifying as export. The Tribunal rejected the Revenue's argument that services were not exported due to being performed in India. Citing a previous order, the Tribunal held that the services met export criteria, dismissing the Revenue's appeals. The Tribunal found no record of the previous order being stayed or set aside, affirming the correctness of following the precedent. The appeals were rejected, upholding the rebate claims.