Appellant's Business Services Qualify as Exports under Export Rules

The Tribunal determined that the appellant's services, including Business Auxiliary Services, qualified as exports under the Export of Services Rules, 2005, both before and after 01.03.2007. The appellant's activities were considered export of service under Rule 3 of the 2005 Export Rules. The Revenue accepted the decision, leading to the Tribunal setting aside the impugned order and allowing the appeal, providing the appellant with consequential relief.

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Issues involved: Determination of the scope of phrases in Export of Services Rules, 2005 and qualification of services as Export of Service.

Comprehensive details:

1. Background: The appellant, a subsidiary of a foreign company, acted as a commission agent to procure sales orders for products manufactured outside India for customers in India. The appellant received commission in convertible foreign exchange, believing it to be an export of service and thus not liable for service tax.

2. Reference to Larger Bench: The Tribunal referred four questions of law to the Larger Bench regarding the interpretation of phrases in the Export of Services Rules, 2005, and whether services rendered to a foreign entity for business development in India qualify as Export of Service.

3. Larger Bench Decision: The Larger Bench determined that the services provided by the appellant, including Business Auxiliary Services (BAS), met the requirements of the Export Rules both before and after 01.03.2007. The appellant's activities were considered as export of service under Rule 3 of the 2005 Export Rules.

4. Appellant's Argument: The appellant contended that the services provided were export of service as per the requirements of Rule 3 of the Export of Service Rules, 2005, despite the customers being from India. The appellant relied on the decision of the Larger Bench to support their claim.

5. Revenue's Submission: The Revenue agreed to abide by the decision of the Larger Bench in this matter.

6. Tribunal Decision: After reviewing the case record and the decision of the Larger Bench, the Tribunal concluded that the appellant's activity indeed qualified as export of service. Consequently, the impugned order was set aside, and the appeal was allowed, granting the appellant consequential relief.

This judgment clarifies the scope of phrases in the Export of Services Rules, 2005 and affirms the qualification of the appellant's services as Export of Service based on the decision of the Larger Bench.

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