Export of Services Decided Case Laws

SGS India Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai Service Tax: Technical Inspection and Certification Services and Technical Testing and Analysis Services: Services rendered to clients situated abroad: Export of Services: In the instant case, 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. By no stretch of imagination can it be said that there was no export of service. The services, in question, were exported. Export of service has ever been tax-free as observed by the CBEC. This exemption has never been affected or its rescission. Ultimately no service tax was leviable from the appellant. Manglam Yarn Agencies Vs. CCE, Jaipur-II Service Tax: Business Auxiliary Services: Commission for finding customers for Nepalese Client: Payment received in Indian Currency: Export of Service Rules, 2005: Pre-deposit: The Export of Service Rules, 2005 provides for exemption of service exported subject to the condition that the payment for such service is received by the service provider in convertible foreign exchange. Learned Adv fairly agrees that the payment has been received in Indian currency. Direct the applicant to deposit the entire service tax within four weeks from today. Kirshore Kumar & Co. (Exports) Pvt. Ltd. Vs. CCE, Mangalore Export of Service: Remuneration received in Foreign currency: Banks converted the same into Indian currency and deposited in appellant’s bank account: Prima facie case made out for waiver. Sobha Developers Ltd. Vs. Commissioner of Service Tax, Bangalore Services provided to Special Economic Zone: Revenue has demanded duty in light of notification no 4/2004 dated 31.3.2004 as appellants have provided Dutiable as well as exempted services and are liable to pay an amount equal to 8% of the value of the services Export of Services: Services rendered by the appellant to the Special Economic Zone (SEZ) units. By virtue of the provisions of SEZ Act, 2005, the services rendered to a unit of the SEZ by an unit in the DTA is treated as an export of service. Unconditional Stay: Appellant have made out prima facie case for waiver of pre-deposit. Unconditional Stay granted against revenues demand . Mportal (India) Wireless solution private Limited Vs. The Commissioner of Service Tax Bangalore Service Tax : Cenvat Credit by STP Units : Input Services : Para 6.11 of the Hand Book Procedures of the Foreign Trade policy 2004-2009 : Obviously the policy of the Government is to allow STP units like the appellants Cenvat credit of duty/service tax paid on input/input service. This benefit is apparently not limited by provisions of the CCR. Therefore, the appellant was entitled to take credit of service tax paid on input services. (para 5) Service Tax : Software development : Export of Software : Refund of Accumulated Credit : Bar of limitation under Section 11B : The ‘relevant date’ specified in Section 11B of the Act does not mention anything as regards refund of cenvat credit. Therefore, the limitation u/s 11B does not apply for refund of accumulated cenvat credit. (para 5) Service Tax : Software development : Export of Software : Cenvat Credit : Registered Service Provider : Documents not produced : Unless the developer of software exported is registered with the department, it cannot earn credit of service tax paid on input services in its accounts. Refund is allowed of credit earned which cannot be utilized, for any reason, and lying in the cenvat account. The objection that the claim had not produced the documents to substantiate the entitlement and the amount is to be sustained. In the result the appeal is rejected. CCE, Rajkot Vs. Shelpan Exports Service Tax: Business Auxiliary Services: Commission: Export of Services: Nothing wrong in the order of the Commissioner (Appeals) and even if it is held that the commission amount should have been received in foreign currency, in this case the respondent has fulfilled this condition. No merit in the appeal filed by the Revenue. Kopran Ltd. Vs. Commissioner of Central Excise, Raigad Service Tax: Consulting Engineer Service: Export of Services: Contention raised by the appellant that any transfer of technical know-how is per se not covered within the ambit of consulting engineers’ service and the same is presently covered by ‘Intellectual Property Rights’, which was introduced as a taxable service only on 10.09.2004. Further, it was pointed out that, even if it is assumed that the appellant rendered a taxable service to the foreign companies, it is a case of export of service. As the same was not considered by the learned Commissioner, matter is remanded back.  Ford India Private Ltd. Vs. Commissioner of Central Excise - LTU, Chennai Export of Service: The foreign recipient did not have any commercial or industrial establishment or office in India is a matter which would decide whether the services could be considered as export of service. Matter remanded back.  Ruth Shipping Agencies Private Ltd. Vs. Commissioner of Central Excise, Thirunelveli Business Auxiliary Service: Appellant a CHA gets brokerage from steamer agent for providing containers: since the secondary services ultimately get consumed/merged with services that are being exported, no service tax would be leviable on such secondary services, the assessees cannot be held liable to pay service tax. IBM India (P) Ltd. Vs. Commissioner of Central Excise, Bangalore Service Tax : Business Auxiliary Service : Export of Service : Pre-deposit of dues :  Indian entrepreneurs engage foreign agents to canvass orders for their products which are exported against such orders. Such services are taxed when imported; the Indian recipient pays service tax under the reverse charge mechanism. When services are similarly provided to a foreign enterprise by Indian agents, it cannot be held that export of services is not involved. Therefore there is no logic in the view that in the instant case export of marketing services (BAS) was not involved. Benefit of service accrued to the manufacturer of computer systems and peripherals based abroad. In any case, Commissioner cannot validly hold a view contrary to that held by the CBEC and communicated for implementation by the officers in the field. The case laws cited also support the claim of the assessee on export of services. Therefore prima facie the appellants are not liable to pay service tax and interest thereon and penalty imposed on them. Pre-deposit waived. Commissioner of Central Excise, Pondicherry Vs. Fairline Worldwide Express  Service Tax: Export of Services: Courier Service rendered outside India: One of the conditions necessary for treating such service as falling under the Export of Services Rules, 2005 is that payment for such service is received by the service provider on payment in convertible foreign exchange. In the present case, there is nothing on record to show that the payment was made to the assessees in convertible foreign exchange and the reference throughout is to payment in Indian currency. Thus the condition of Export of Services Rule itself does not stand satisfied and, therefore, the assessees cannot be held to be entitled to exemption from payment of service tax. The impugned order set aside and the appeal allowed. Agilent Technologies India Private Limited Vs. CCE, New Delhi Service Tax : Business Auxiliary Service : Management , Maintenance or Repair Service : Prima facie the services provided by appellant was in India . In Para 361 earned Commissioner held that this appellant has marketed for the goods in India and activities were undertaken in India. In Para 36.2, it was held that the benefit of service having accrued in India the appellant had not provided export of service. (para 8) Service Tax : Business Auxiliary Service : Management , Maintenance or Repair Service : Pre-deposit : Having gone through the various aspects and considering that the present case is a supply of goods from abroad and the appellants having made deposit of the demand to the extent as aforesaid, pre-deposit of Rs. 1.crore be made within eight weeks. Subject to deposit of this amount, realization of balance demand of service tax and penalty shall be stayed till disposal of the appeal. Muthoot Fincorp Ltd.  Vs. CCE, Visakhapatnam Service Tax: Business Auxiliary Services: Export of Services: It can be seen from the above reproduced clarification that it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside India. It is an admitted fact that the benefits of the services rendered by the appellant are accrued to a person who is situated outside India and to Western Union, who is also situated outside India. The services rendered by the appellant cannot be taxed under the category of `business auxiliary services'. Prasad Corporation Ltd. Vs. Commissioner of Service Tax, Chennai Export of Services: The submission that the service is required to be treated as "Export of Services" is not tenable in the present case, as no taxable service has been performed by the applicants outside India. Limitation: The plea that the demand is partly barred by limitation is also not tenable for the reason that non-payment of service tax by the applicants came to the notice of the department only when officials visited the unit of the applicants and called for relevant details. Stay partly granted Hitachi Home and Life Solution (I) Ltd  Vs, Commissioner, C. Ex. Ahmedabad-III Service Tax: Appeal dismissed for non-compliance of stay order: Remand: The benefit stands denied by Original Adjudicating Authority only on the ground that the commission received by the appellants in foreign currency was not repatriated and no evidence stand produced by the appellant to that effect. There is no evidence produced by the Revenue to the contrary. The appellants have sworn on affidavit that the amount was not repatriated. Such services would fall under the category of Export Services and in terms of Export of Services Rules 2005, no tax is liable to be confirmed in respect of the same. The appellant has good prima-facie case on merits. The impugned order set aside and remand the matter to Commissioner (Appeals) for decision on merits, without insisting on any pre-deposit. Sky Courier International  Vs. Commissioner of Service Tax, Ah'bad. Courier Services: Courier services provided partly in India and partly abroad since the services involved is international courier service. Exemption under export of service Rules is available and therefore, no service tax is liable to be paid. Stay granted. Nipuna Services Ltd. Vs. The Commissioner of Central Excise, Customs & Service Tax (Appeals-II) Hyderabad Refund on Services exported: Revenue is denying the refund for the simple reason that the appellant themselves had not directly received the payment in foreign currency. It is axiomatic that goods and services exported would not be subjected to local taxes. Denying the refund would violate this fundamental principle of taxation. Liberal Interpretation: Even if it is assumed that right from the beginning, there was a requirement for getting the payment in foreign exchange, we would hold that the appellant would be satisfying such a condition also by a liberal interpretation of the notification Bathija International Vs. CCE, Salem Commission paid to Foreign Agents: The appellant is an exporter of fabrics. Orders for its products are procured from customers abroad through agents based abroad. The appellant paid commission for the said service during the period 12.8.2004 to 27.9.2006. The service rendered abroad and received by the appellant was not exigible to service tax for the period prior to 18.4.2006 when 66A of the Act was introduced in the statute. Appeal allowed SGS India Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai Export of Services : Services which were provided by the applicant are for the foreign based purchasers who required the services for testing and inspection by the appellant and based upon such report the goods are dispatched to the foreign purchasers. Export of services are not taxable as per the statement of Government of India, and the Central Board of Excise & Customs Circular No. 56/5/2003-S.T. Professional Couriers Vs. Commr. of Service Tax, Chennai Export of Services : There was nothing in the Export of Services Rules (as they stood during the material period) to indicate that the consideration for export of services should be received in convertible foreign exchange, for claiming the exemption under Rule 4. The view taken by the lower authorities may be good only for the period from 16-6-2005. Before that date, the appellants were not liable to pay service tax on the international courier service, part of which was performed in India and the rest outside. Commr. of Service Tax, New Delhi  Vs. Cani Merchandising Pvt. Ltd. Export of Service : Revenue contended that service of booking orders for foreign supplier for supply of goods in India, therefore, such service is not delivered outside India and also not used outside India. Tribunal observed that this aspect has not been considered by the adjudicating authority or the Commissioner, hence, the matter remanded back. Revenue’s appeal allowed by way of remand Blue Star Ltd.  Vs. Commissioner of Central Excise, Bangalore Business Auxiliary Service: Service of booking orders in India for the principals abroad does not amount to export of service in terms of Rule 3(2) of the Export of Services Rules, 2005. The commission paid to the service provider by the principals in convertible foreign exchange does not amount to service rendered in Business Auxiliary Service. TNT India Private Limited Vs. Commissioner of Service Tax, Bangalore Courier Agency Service: Part service rendered outside India: In terms of Rule 3(2) with effect from 15-6-2005, the appellant would be liable to pay the Service Tax, as the service would be considered as export of service only if payment is received in convertible foreign exchange. In any case for the relevant period in terms of Rule 3(2), the services rendered by the appellant should to be deemed to have been performed outside India and therefore, the appellant will not be liable for payment of Service Tax during that relevant period in terms of Rule 4.  Konkan Marine Agencies Vs. Commissioner of C. Ex., Mangalore Cargo Handling Service: Appellants erroneously paid service tax on providing service relating to export cargo which is exempt from payment of service tax: Department contended that it was “Port Service”, the Commissioner (A) held that it was not Port Service as they were not authorized by the Port to render the services, though they were having stevedoring license issued by Manglore Port, Refund was sanctioned transfer to Consumer Welfare Fund : Commissioner revised the Order by crediting the amount to Government Account by holding that it was a “Port Service”. Finally, it is held that it was only a Cargo handling service and export cargo is exempted from service tax Gokaldas Images Ltd. Vs. Union of India EXIM Policy : Garment export is peculiar in its nature because quotas are provided for each country. The Government is well within its right to provide for full and maximum utilization of the quota and that is what has been done. there must be free play with the Government, especially in matters of economic policy formulation and such economic policies are not subject to judicial review unless it is demonstrated that the same is contrary to any statutory provision or the Constitution.