Export of service treatment for CHA work to overseas customers defeats Service Tax liability.

CHA services rendered in India to overseas customers were treated as export of service under the Export of Services Rules, 2005 because the activity was supplementary to the assessee's freight forwarding business, the service was used outside India, the benefit accrued to foreign recipients, and consideration was received in convertible foreign exchange. The Tribunal applied Rule 3 and held that the export conditions were satisfied; accordingly, the CHA service was not liable to Service Tax and the confirmed demand, interest, and penalties were set aside.

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Issues: Whether CHA services rendered to overseas customers in India qualified as export of service under the Export of Services Rules, 2005 and were therefore not liable to Service Tax.

Analysis: The Tribunal held that the assessee's CHA activity was supplementary to its principal freight forwarding business and was undertaken for overseas customers through foreign group entities. It accepted that the service was used outside India, the benefit accrued to recipients located abroad, and consideration was received in convertible foreign exchange. The Tribunal applied the export-of-service framework under Rule 3 and found the conditions for export satisfied. It also noted that the CHA service formed part of the composite service rendered to foreign customers and followed its own earlier order taking the same view on substantially similar facts.

Conclusion: The CHA service rendered to overseas customers constituted export of service and was not exigible to Service Tax. The demand, interest, and penalties confirmed against the assessee were set aside, and the Revenue's appeal was rejected.

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