The appellant provided steamer agent and cargo handling agency...

The appellant provided steamer agent and cargo handling agency services, which involved segregation, internal shifting of timber logs, and sending progress reports to foreign principals. The services were partly performed outside India as the progress reports were sent to foreign service recipients. According to Rule 3(ii) of the Export of Service Rules, 2005, if a service covered under sub-clauses (zn) and (zr) is partly performed outside India, it shall be considered as performed outside India. Since the progress reports were an essential part of the overall service and were delivered outside India, it amounted to part performance of the taxable service outside India. Based on the CESTAT rulings in SGS India Pvt Ltd and B A Research India Ltd, where delivery of reports to clients outside India was considered part performance outside India, the services provided by the appellant qualify as export of services u/r 3(ii) of the Export of Service Rules, 2005. As the appellant received payment in convertible foreign exchange, the demand was held unsustainable.