Tribunal grants refund for service tax on input services deemed as export under Cenvat Credit Rules

The Tribunal allowed the appeals in favor of the appellants, setting aside the denial of refund claims by the department for service tax paid on input services. The Tribunal held that the services provided by the appellants to their parent company located abroad constituted export of service, entitling them to refund under Rule 5 of Cenvat Credit Rules, 2004. The Tribunal emphasized that the services consumed abroad could be considered as 'export of service,' aligning with the judgment of the Bombay High Court and previous Tribunal decisions.

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Issues involved:
The issues involved in the judgment are the denial of refund claims by the department to the appellants for service tax paid on input services, the applicability of Place of Provisions of Service Rules, 2012, and the determination of whether the services provided by the appellants to their parent company located abroad can be considered as export of service.

Refund claims denial:
The appellants, engaged in providing taxable service under 'Business Auxiliary Service,' filed refund applications under Rule 5 of Cenvat Credit Rules, 2004, claiming refund of service tax paid on input services. The department denied the refund, stating that the transactions with the overseas entity cannot be considered as export of service. Appeals were made to the Tribunal against the denial of refund.

Applicability of Rules:
The Advocate for the appellants argued that the Place of Provisions of Service Rules, 2012 should not be applicable for denial of refund as the relevant period predates the enforcement of these rules. Citing previous Tribunal decisions and a Bombay High Court order, it was contended that the activities undertaken by the appellants should be considered as export, entitling them to refund under Rule 5 of Cenvat Credit Rules, 2004.

Export of service determination:
The authorities denied the refund, stating that the appellants did not export the technical service, Technical Testing Service. However, the Tribunal referred to a previous order where a similar issue was decided in favor of the appellants, based on the judgment of the Bombay High Court. The High Court's decision highlighted that services rendered by the appellants, consumed abroad, can be considered as 'export of service,' making them eligible for refund. The Tribunal concurred with this view, allowing the appeals in favor of the appellants and setting aside the impugned orders confirming the demands against them.

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