2016 (9) TMI 324

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.... of services.   The Adjudicating authority  in adjudication sanctioned refund claim of Rs. 24,94,475/- but rejected  remaining refund claim amounting  to Rs. 9,13,701/-  on the ground  that the turnover of services provided  by the assessee's  branches  located South Africa  and UK  is not qualified  as export  turnover of the assessee.  Being aggrieved by the original order,  the assessee filed appeal  before the Commissioner (Appeals).  The Ld. Commissioner (Appeals) though upheld  the principle  laid down  by the original  authority that the turnover of the services provided by the branches located in South Africa and UK is not part of the assessee's  export turnover,  however, interpreting  the term 'total turnover' held that the total  turnover comes to Rs. 18,87,82,265/-(Rs. 17,73,46,004 towards the export turnover plus Rs. 1,14,36,261/- towards other services).  Thus,  the turnover of overseas  branch offices were not considered  in the total turnover.  Accordingly, the Ld. Commissioner further sanctioned the refund claim ....

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....otal turnover' of the assessee.  The Ld. Commissioner by deducting  the branch turnover  from 'the total turnover' allowed the refund of Rs. 7,68,757/- which is not  legal and correct. 4.  I have carefully considered the submissions made by both sides and perused the record. 5.  The issue to be  decided by me  are as under: (a)  whether, in the facts of the present case, the turnover of branches of assessee's  located in South Africa and UK should be  treated as  export turnover of the assessee. (b)  Whether  the value of service provided  by the overseas branches  of the assessee should be  included in the 'total turnover'  of the assessee. As regard the  first issue, as per  the fact of the  present case the service was provided  by the branches  of the assessee  located in South Africa and UK, the invoices for such services  were raised by the respective branches to the foreign  based service  recipients.  The  service charges  in respect of the service provided  by the branches were also  received by the b....

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....any activity relating to use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; (ii) any activity carried out, for a consideration, in relation to, or for facilitation of, a transaction in money or actionable claim, including the activity carried out- (a) by a lottery distributor or selling agent on behalf of the State Government, in relation to promotion, marketing, organising, selling of lottery or facilitating in organising lottery of any kind, in any other manner, in accordance with the provisions of the Lotteries (Regulation) Act, 1998; (b) by a foreman of chit fund for conducting or organising a chit in any manner. Explanation 3.- For the purposes of this Chapter,- (a) an unincorporated association or a body of persons, as the case may be, and a member thereof shall be treated as distinct persons; (b) an establishment of a person in the taxable territory and any of his other establishment in a non-taxable territory shall be treated as establishments of distinct persons. Explanatio....

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.... The place of provision of a service shall be the location of the recipient of service: Provided that in case the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service. Rule 2 [6A Export of Services. - (1) The provision of any service provided or agreed to be provided shall be treated as export of service when, - (a) The provider of service is located in the taxable territory, (b) The recipient of the service is located outside India, (c) The service is not a service specified in the section 66D of the Act, (d) The place of provision of the service is outside India, (e) The payment for such services has been received by the provider of service in convertible foreign exchange, and (f) The provider of service and recipient of service are not merely establishments of a distinct person in accordance with item (b) of Explanation 3 of clause (44) of section 65B of the Act. (2) Where any service is exported, the Central Government may, by notification, grant rebate of service tax or duty paid on input services or inputs, as the case may be, used in providing such ....