By TIOL News Service

MUMBAI, NOV 25, 2014: THE appellant is in the business as commission agent of their foreign counterpart for which they are promoting their product in India by way of advertising, marketing etc. Consequently they procure orders for their foreign supplier who delivers goods in India.

Revenue is of the view that as the said activity is performed in India, therefore, the appellant is required to pay service tax under Business Auxiliary Service under reverse charge mechanism.

Be that as it may, it transpires that the appellant had filed a refund claim of the tax paid by them and the same was rejected by the lower authorities holding that the service of the appellant does not fall under the Export of Services Rules, 2005.

Aggrieved by the said order, the appellant is before the CESTAT.

Revenue has also filed Cross Objections to the appeal filed by the appellant to the extent that some part of the refund claim has been also allowed by the Commissioner (Appeals).

After hearing the submissions made by both sides, the Bench inter alia while holding that the appellants are entitled for refund made the following observations -

++ In a similar situation as involved, in the case of Blue Star Ltd. - 2014-TIOL-2257-CESTAT-MUM, the Tribunal has held that it is a case of export of service;

++ Whether the payment received by the appellant in Indian currency can be termed as the remuneration received by the appellant to qualify as per the Export of Service Rules, 2005 or not. The same issue is covered by the decision of this Tribunal in the case of National Engineering Industries Ltd vs CCE, Jaipur - 2011-TIOL-1060-CESTAT-DEL where it was held that it is a case of export of service.

The CESTAT also held that there was no infirmity in the order of Commissioner (A) allowing refund of excess amount of service tax paid.

Conclusion: In a nutshell, it is held that it is the case of Export of Service as per Rules, 2005 therefore, the appellant is entitled to refund claim and the Cross Objections, filed by Revenue have no merits and hence dismissed.

(See 2014-TIOL-2342-CESTAT-MUM)