TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 1496
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....services even after the assessee had not received the payment on convertible foreign currency in contravention to Rule 3(1) (b) of the Export of Service Rules, 2005? 3.2 Appeal No.37/2009 admitted on 27.7.2011 "Whether the Hon'ble CESTAT is correct in deciding the issue in favour of the assessee regarding export of services even after the assessee had not received the payment on convertible foreign currency in contravention to Rule 3(1)(b) of the Export of Service Rules, 2005? 3.3 Appeal No.9/2012 admitted on 20.7.2012 "Whether as per the facts and circumstances of the case, the learned Tribunal is correct in law in deciding the issue in favour of the assessee regarding export of services even after the assessee had not received the payment on convertible foreign currency in contravention to Rule 3(1) (b) of the Export of Service Rules, 2005? 3.4 Appeal No.5/2012 which is not admitted is admitted on the following substantial question of law:- "Whether the CESTAT is correct in deciding the issue in favour of the assessee regarding export of services even after the assessee had not received the payment on convertible foreign currency in contravention to Rule 3(1)(b) of....
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....Indian rupees at the TT buying Rate of Exchange prevailing on the date of supply order which is USD 1.00-Rs. 43.50 on 31.12.04 to your Indian Agent M/s. NEI Ltd., Jaipur. Agent will submit the bill together with certificate issued by consignee regarding receipt of material in good conditions in accordance with the contract and current valid ITCC." 6. Counsel for the appellant contended that when the interpretation of statue is to be made the Rule 3 will govern the field which is reproduced as under:- "3. Export of taxable service. - (1) Export of taxable services shall, in relation to taxable services'- (i) specified in sub-clauses (d), (m), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), (zzzh), (zzzr), (zzzy), (zzzz), (zzzza) & (zzzzm) of clause (105) of section 65 of the Act, be provision of such services as are provided in relation to an immovable property situated outside India; (ii) specified in sub-clauses (a), (f), (h), (i), (j), (l), [* * *], (n), (o), [* * *], (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv),(zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), (zz....
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....vice provider in convertible foreign exchange. Explanation.- For the purposes of this rule "India" includes the installation structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof. 7. Counsel for the appellant has emphatically relied on clause (c) of Rule 3 and contended that in view of this clause (c), the interpretation given by the tribunal is running contrary to the taxing statue and the view taken by the Commissioner (Appeals) is required to be restored and the benefit granted by the tribunal is required to be restored back in favour of the department. 8. He has relied upon the decision of Supreme Court in the case of Saraswati Sugar Mills vs. Commissioner of Central Excise, Civil Appeal No.5295/2003 decided on 2.8.2011 wherein the Supreme Court observed as under:- "7. The Tariff Act prescribes the rate of duty for each chapter head and subhead. The Tariff Act has authorized the Central Govt. to modify the rates/duty by issuing notifications. Since exemption notifications are issued under delegated legislati....
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....re, this is not a case of export of service as per Export of Service Rules, 2005. In fact, in case of marketing of product of their foreign counterpart in India but the service of marketing of product a person who is located outside India has consumed the service outside India. In these circumstances, it is held that the case of the appellant qualifies as export of service as per Rule 3(3)(i) of the Export of Services Rules, 2005. The same view was taken by this Tribunal in Blue Star v. CCE in Appeal No. ST/74/2008 (Order No. A/1983-1986/CSTB/CI, dated 3-9- 2014 wherein the Tribunal has held in such a situation it is a case of export of service. 5. The next issue is that whether the payment received by the appellant in Indian currency can be termed as the remuneration received by the appellant qualify as per the Export of Service Rules, 2005 or not. In fact the appellant has received the payment on behalf of their counterpart from the client of their foreign counterpart. The same issue is covered by the decision of this Tribunal in the case of National Engineering Industries Ltd. v. CCE, Jaipur reported in MANU/CE/0404/2011 : 2011 (24) S.T.R. 683 (Tri.-Del.) wherein on the simil....
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.... we are accepting the statement made by the counsel for the respondent-assessee and we are presuming that the order of Mumbai Tribunal is accepted by the department. 13. We have heard counsel for the parties. 14. The very object of the Export of Service Rules, 2005 is that such services are performed outside India and payment for such service provided is received by the service provider in convertible foreign exchange. 15. The tribunal while considering the matter aptly observed as under:- 6. It appears from the Annexure to Purchase Order taht necessary foreign exchange would be released to the India Railways for payment to GMC. It further appears that the appellant shall raise the bill to the consignee(India Railways) at 5% agency commission at USD which shall be paid in equivalent to nonconvertible Indian rupees. Ld. Advocate submits that Indian Railways deducted the commission of the appellant in their bills raised to M/s. GMC, USA and the less amount of foreign-exchange was released. Thus, if GMC would pay the appellant agency commission in foreignexchange, then the same amount of foreign-exchange shall be released to Indian Railways to pay GMC, USA. In effect, the amo....