TaxTMI 
TaxTMI 
2014 (12) TMI 25
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....s refundable. Consequently, the appellant filed the refund claim for the period August 2005 to July 2006 which was rejected by both the lower authorities on the ground that the services rendered by the appellant does not fall under the Export of Taxable Service Rules, 2005 (sic) . Therefore, refund claims was rejected. Aggrieved from the said order, appellant are before us. 3. The ld. counsel appeared on behalf of the appellant submits that the appellant are the agents/distributors of their foreign clients and are promoting their business by procuring purchase orders. Against those purchase orders, their clients are supplying goods to the intended buyer in India directly. This equipment were supplied by the clients having the warranty and during the warranty period, the foreign clients of the appellant appointed them to provide repair, maintenance service during the period of warranty on behalf of their clients to the buyers in India. It is the contention of the ld. counsel that the activity of the appellant is covered under the category of Business Auxiliary Service which is defined under Section 65 (105)(zzb) of the Finance Act, 1994. He further submits that as per Notification ....
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....umstances, we find that a similar case came up before this Tribunal in Paul Merchants Ltd. 2013 (29) STR 257 wherein the facts of the case are that the person who is located outside India wanted to send money through Western Union in India. Western Union are having Paul Merchants Ltd. as their agent in India who on instructions of Western Union delivered the money to the person located in India. In those set of facts, the Tribunal has examined the issue as observed as under:- "the activity of remittance of money by a person abroad to his intended beneficiary in India starts at the office of WU or by an agent/sub-agent abroad when he hands over the money to be remitted along with commission and the details of the intended beneficiary in India and after payment of money to be remitted along with commission, he is given a unique code number by the WU/their agents/sub-agent. WU do not have any office or business establishment in India and they operate in India through a network of Agents and sub-agents appointed by agents with the approval of WU. The role of Agents and sub-agents is that when the intended beneficiary approaches them with the ....
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....sp; (b) the services provided by the sub-agents appointed by Agents, amount to export of service out of India and, hence, not taxable in India. Linked with this question are the questions- (i) ... (ii) who is the recipient of the service provided by Agents and the sub-agents whether the WU located abroad or the persons in India who received the money sent by their relatives, friends etc. abroad through WU? (iii) Whether the services, in question, have been used and consumed, abroad by the WU or used and consumed in India by the intended beneficiaries of the money sent by persons abroad through WU?" " 70.3 But determining the place of consumption is a complex task on account of intangible nature of services and the different modes by which a service can be provided and can be consumed i.e. used by the recipient to satisfy his needs. The place of consumption and the location i.e. permanent address of the service recipient may be different. A uniform criteria....
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....nbsp; In fact the European Union has similar rules for determining Place of Provision of Service where the Service is taxable. Thus, the Export of Service Rules, 2005 and Taxation of Services (provided from outside India as received in India) Rules, 2006, are basically the rules for determining the place of consumption of Services . These rules in the budget of 2012-13 have been replaced by Place of Provision of Service Rules, 2012, the Rule 3 of which states that the place of provision of a service shall be the location of the service recipient, (who is the service consumer). Therefore, in my view, there is nothing in the Export of Service Rules, 2005 which can be said to be contrary to the constitutional provisions of the Apex Court's judgment in the case of All India Federation of Tax Practitioner's Association (supra). 7. Further, the Tribunal observed as under:- "71 . In this case, the service provided by the Agents to WU , as discussed in para 68 above, is "Business Auxiliary Service" covered by Section 65(105) (zzb) read with Section 65(19) of the Finance Act, 1994. Since this se....
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....unal - 2011-TIOL-666-CESTAT-MUM held that the services rendered by the appellant were consumed abroad where the appellant's clients used the service of inspection/test/analysis to decide whether the goods intended to be imported by them from India conformed to the requisite specifications and standards. In other words, the benefit of the service accrued to the foreign clients outside the Indian territory. Therefore, it cannot be said that there was no export of service. The matter was taken up to the Hon'ble High Court and the Hon'ble High Court held as under:- "24. In the present case, the Tribunal has found that the assessee like the respondent rendered services, but they were consumed abroad. The clients of the respondents used the services of the respondent in inspection/test analysis of the goods which the clients located abroad intended to import from India. In other words, the clients abroad were desirous of confirming the fact as to whether the goods imported complied with requisite specifications and standards. Thus, client of the respondent located abroad engaged the services of the respondent for inspection and testing th....