By TIOL News Service

MUMBAI, JUNE 02, 2015: THE appellants are registered under the category of 'Banking and Other Financial Services' and 'Market Research Agency Services'. They entered into a Business Service Agreement with M/s. AMP Capital Australia, Sydney. As per the said agreement, the appellant is required to provide Advisory services to AMP Capital Australia.

The service-recipient used the advice received from the appellant in further advising their customers in making investments in India.

Treating the aforesaid services to AMP Capital (Australia) as being covered under 'export of services', the appellant filed refund claims in respect of input services under Rule 5 of CENVAT Credit Rules, 2004 for amounts of Rs. 6,03,801/-, Rs. 3,88,025/-, Rs.3,99,388/- and Rs. 2,60,979/-. Whereas the claim of Rs. 6,03,801/- was rejected the remaining claims were sanctioned. The Commissioner (Appeals) upheld the rejection and also set aside the orders allowing the refund. The ground taken is that the services provided to M/s. AMP Capital (Australia), Sydney were used in India and, therefore, the same does not qualify as 'export of service'.

So, the appellant is before the CESTAT.

It is submitted that although the research and analysis regarding investment was carried out in India the recipient is an Australia based entity, i.e. M/s. AMP Capital (Australia) and, therefore, there is no dispute that the services were used outside India. In support, the appellant placed reliance on the following decisions viz. Amba Research (India) Pvt Ltd. vs. Commissioner of Service Tax, final order No. 21741/2014 dated 24/09/2014, Greater Pacific Capital Pvt. Ltd. - 2014-TIOL-1726-CESTAT-MUM, Bain Capital Advisors India Pvt. Ltd. - 2015-TIOL-119-CESTAT-MUM and Board Circular No. 111/5/2009-S.T. dated 24/02/2009 and Circular No. 141/10/2011-TRU dated 13/05/2011.

The AR parroted the findings of the lower appellate authority.

The Bench inter alia observed -

"…It is undisputed that the appellant is receiving the remittance in convertible foreign exchange towards fees of their services. The services, through related to the analysis carried out in India, but the services are provided to Australia based firm M/s. AMP Capital (Australia). These services are not provided to any person located in India and nobody in India is concerned about the services. Since the services are provided to Australia based firm it is that firm, M/s. AMP Capital (Australia) who is the sole recipient of the services and on the basis of these services, M/s. AMP Capital (Australia) is further providing services to the foreign based companies. That shows, that the services provided by the appellant is consumed by M/s. AMP Capital (Australia), Australia for providing his output services to foreign based companies. Under these facts there is no dispute that the services provided by the appellant are indeed used and consumed by M/s. AMP Capital (Australia) in Australia). Therefore, the services are used outside India."

After extracting the findings from the decisions passed in the case of Amba Research (India) Pvt Ltd., Greater Pacific Capital Pvt. Ltd. - 2014-TIOL-1726-CESTAT-MUM, Bain Capital Advisors India Pvt. Ltd. - 2015-TIOL-119-CESTAT-MUM, the Bench concluded -

"In view of the above judgments it is found that the services were carried out in India but the recipient is outside India and, therefore, the services provided by Indian entity is deemed to be used by the person located outside India and, therefore, it satisfies the term used "outside India" provided under the Export of Service Rules. Therefore, following the ratio of the above judgments it is absolutely undisputed that the appellant has provided the services from India and the same was used outside India. Accordingly it qualifies as 'export of services' and refund is admissible."

Holding that the appellant is rightly entitled to the refund, the orders passed by the Commissioner(A) were set aside and the appeals were allowed.

(See 2015-TIOL-1001-CESTAT-MUM)