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of <h1>Appeal Granted: Procedural Flaws Overturned, Export of Service Confirmed</h1> The Tribunal allowed the appeal, setting aside the impugned order due to procedural flaws and affirming the merit-based argument that the services ... Scope of SCN - Refund of unutilized CENVAT credit of service tax - sales, marketing and administrative services - export of service or not - allegation is that the impugned order have all travelled beyond the SCN - HELD THAT:- When the show-cause notice dt. 28/03/2014 was issued when the appellant filed the refund claim and the grounds raised in the show-cause notice was lack of nexus, claim is time barred and lack of documentation or discrepancies in documents; whereas when the Order-in-Original dt. 16/01/2018 was passed, the original authority travelled beyond the show-cause notice and came to a finding that the sales, marketing and administrative services are classified as BAS provided in India and hence Rule 6A not fulfilled and the appellant is acting as an intermediary. Further, the appellant has satisfied all the six conditions of Rule 6A which proves that these services rendered by them are export of service. Thus, the impugned order is bad in law as it has travelled beyond the show-cause notice and also on merit, the services rendered by the appellant fall in the definition of ‘Export of Service’ and the appellant is entitled to refund of the said amount - appeal allowed - decided in favor of appellant. Issues:Refund claim rejection based on export turnover classification; Interpretation of intermediary services in the context of service export; Legality of orders surpassing show-cause notice grounds.Analysis:The case involved a refund claim rejection by the original authority due to the classification of export turnover. The appellant filed a claim supported by Order-in-Appeal No.676/2018 but faced rejection of a portion of the claimed amount. The rejection was based on the classification of certain services as Business Auxiliary Services (BAS) provided in India, affecting the export turnover calculation. The subsequent Order-in-Original upheld this rejection, leading to an appeal and a remand by the Commissioner(Appeals) for fresh adjudication. However, the original authority's subsequent rejection was based on considering BAS as intermediary services, leading to another appeal.The appellant argued against the rejection on both procedural and merit grounds. Procedurally, the appellant contended that orders had surpassed the show-cause notice grounds, citing legal precedents emphasizing the foundational nature of the notice in demand determination. The appellant also highlighted the binding nature of higher authority orders on lower authorities. On the merit side, the appellant asserted that the services provided to foreign group companies were not intermediary services but fell under the definition of export of service. The appellant emphasized the principal-to-principal nature of the services, absence of a principal-agent relationship, and compliance with Rule 6A conditions for service export.The Tribunal analyzed the case, noting discrepancies between the show-cause notice and subsequent orders. It found that the rejection based on BAS being considered intermediary services was legally flawed. The Tribunal agreed with the appellant's arguments regarding the nature of services provided, citing legal precedents and Rule 6A conditions satisfaction. The Tribunal highlighted that the services were provided on a principal-to-principal basis, with no intermediary role involved. It referred to previous judgments supporting the appellant's position and concluded that the impugned order was legally unsound and that the services rendered indeed qualified as export of service, entitling the appellant to the refund claimed.In conclusion, the Tribunal allowed the appeal, setting aside the impugned order due to procedural flaws and affirming the merit-based argument that the services provided by the appellant constituted export of service. The decision was pronounced in open court on 29/03/2021.
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