TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 759
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.... by the appellant in convertible foreign exchange. The appellant had sought the exemption on the said amount claiming the same as export of service. The Revenue however, alleged that the said exemption has wrongly been claimed. The services provided are not the export of service, as the nature of activity of the appellant is that of business support service, which is not among the services mentioned in the list of service on which whole of Cenvat Credit of Service Tax is available under Rule 6 (5) of Cenvat Credit Rules, 2004 (CCR). Accordingly, a show cause notice No.89 dated 20.10.2011 was served, demanding the Service Tax for an amount of Rs. 5,27,934/- alongwith the interest at the appropriate rate and the penalties. The Cenvat Credit of Rs. 29,61,745/- as was availed by the appellant was also proposed to be disallowed as being wrongly availed. The said proposal was confirmed initially by the Order-in-Original No.21 dated 07.03.2013. Being aggrieved, the appeal was filed before Commissioner (Appeals), who vide the order under challenge has upheld the findings of Assistant Commissioner. Being aggrieved, the appellant is before us. 2. We have heard Ms. Priyanka Rathi, Advocate f....
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....ices, as the service was used in India. The customers as procured in lieu of the service provided by the appellant were based in India. Hence the service do not qualify the definition of export of service. The order accordingly, has no infirmity to this aspect. With respect to appellant being a recipient from PAIB, it is held that the services are very much in nature of business support on which the Cenvat Credit is not admissible. The credit availed has rightly been disallowed. Appeal is accordingly prayed to be dismissed. 5. After hearing both the parties, we are of the opinion as follows:- 5.1 The present appeal has following two issues: (1) Appellant is providing service to Hunkeler AG, a company based outside India whether or not it amounts to Export of Service. (2) Appellant is receiving service from PAIB whether or not the same is Management and Consultant Service for which the appellant is entitled to avail the Cenvat Credit or it being a Business Support Service is out of the ambit of Rule 6 (3) of CCR. Issue-wise findings are as follows:- For adjudication of the first issue we need to understand the concept of export. It is enshrined under Article 286 (1) (b) of Cons....
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....change." Position from 19.04.2006 to 28.02.2007 "The provision of any taxable service shall be treated as export of service when he following conditions are satisfied, namely:- (a) Such service is delivered outside India and used outside India, and (b) Payment for such service provided outside India is received by the service provider in convertible foreign exchange." Position from 01.03.2007 to 31.03.2008 "The provision of any taxable service specified in sub-rule (1) shall be treated as export of service when the following conditions are satisfied namely:- (a) Such service is provided from India and used outside India; and (b) Payment for such service provided outside India is received by the service provider in convertible foreign exchange." It may be seen that the phrase "delivered outside India" used initially could not have been understood clearly in the case of services which is intangible and so the expression was replaced by "is provided from India" which is an expression better understood. However the meaning of the expression "used outside India continued to create interpretational difficulty till this expression also finally got deleted on 27.02.2010." 6. In ....
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....ndia and service recipient is located abroad, no service tax is charged from the service provider, and (c) when service provider is abroad, not having any establishment or branch in India, and the service recipient is in India, service tax is charged from the service recipient under reverse charge mechanism; is in accordance with the principle laid down by the Apex Court that service tax is a destination based tax on consumption. In this regard, service tax is similar to other indirect taxes like Central Excise and Customs duties." 7. Thus, seen from the above discussed law and the above observations, we hold the services provided by the appellant to Hunkeler AG is irrespective it was performed on the customers based in India but it is the export of service. In the given circumstances, the findings of both the adjudicating authority below to this aspect are held to be wrong and therefore are set aside. 8. Now coming to the classification of service being received by the appellant from PBAP, we are of the opinion that the definition of Management Consultant Service and the Business Support Service first need to be looked into. As per Section 65 (65), of the Finance Act, 1944: ....
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....ng, Development, modification, rectification or up-gradation of any working system of any organisation but for a service to be a support service of business or commerce. It has to be in relation to business and commerce only in terms of its customers. We can conclude that the scope of management consultancy service is very wide and it may include business support services as well. But in case, the services received or provided are something more than being customer based, it cannot be support service of business. 9. Now reverting to the agreement between the appellant and PBAP dated 01.01.2009, we observe that appellant was receiving the following services:- 1. Accounting support for forecasting, budgeting and deal forecasting 2. HR support services. 3. Management support and consulting services 4. Marketing Assistance 5. Provision and/or coordination of legal and tax advice 6. Order processing (where required) 7. Business Development 8. Process Improvement - Business transformation and six-sigma. 9. Merger and acquisitions 10. Certain advisory and support services. 10. The perusal makes it abundantly clear that the services received by the appellant are not merely cust....