TMI Blog2023 (10) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... third-party i.e.M/s Glaxo SmithKline Services, Unlimited, UK. It has been clarified that the said third-party has been maintaining the accounts of M/s SB Plc, UK - It is found that as long as the service is enjoyed by the contracting party, routing of payment or consideration through a third-party does not alter the position. The services rendered by the respondents to M/s SB Plc, UK constitute export of service as the services are utilized by a company situated outside India and used outside India - the Department has not made out any case for intervening with the impugned order - Appeal of Revenue dismissed. - MR. S. S. GARG, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Ms. Shivani, Authorised Representative for the Appellant Ms. Krati Singh, Advocate for the Respondent ORDER M/s Glaxo SmithKline Asia Private Limited, the respondents, are engaged in providing Business Support Services and Manpower Recruitment and Supply Services to M/s SmithKline Beecham Plc. (SB Plc), U.K. as per an Agreement entered into between them. Revenue was of the opinion that the services rendered by the respondents do not qualify as export of services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010. She submits that the issue is no longer res integra in view of the following decisions: B.G. Energy India Pvt. Ltd.- 2019 (24) GSTL 430 (Tri. Delhi). Arcelor Mittal Stainless (I) Pvt. Ltd.- 2023-TIOL-469- CESTAT-MUM-LB. A.T.E. Enterprises Pvt. Ltd.- 2018 (8) GSTL 123 (Bom.). Wartsila India Ltd.- 2019 (24) GSTL 547 (Bom.) Blue Star Ltd.- 2018-TIOL-1976-HC-MUM-ST. Verizon Communication India Pvt. Ltd.- 2018 (8) GSTL 32 (Del.). Reebok India Company- Final Order Nos.60287- 60288/2023 dated 25.08.2023 (Tri. Chan.). Baheti Agri Links- Final Order No.51027/2023 dated 02.08.2023 (Tri. Delhi). Orbit Research Associates Pvt. Ltd.- Final Order No.50970/2023 dated 31.07.2023. IBM India Pvt. Ltd.- 2020 (34) GSTL 436 (Tri. Bang.) 5. Learned Counsel for the respondents further submits that it is incorrect on the part of the appellant/ Department to state that the respondent has not submitted enough evidence to prove that the service is used outside India and that in view of the Circular dated 13.05.2011 (supra), the phrase used outside India should be interpreted in the context of place of effective use and the enjoyment of service. She submits that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also consumed in India. 23.3. However, on perusal of the aforesaid agreement between notice and SB Plc, UK, it is seen that there is no such evidence in the agreement which would indicate that the services have been consumed in India. Moreover, the scope of services in the agreement includes services like sending the ultimate reports w.r.t. clinical trials being done in India to M/s SB Plc, UK with whom the noticee had entered into agreement. Therefore, once the reports are being sent outside India for the benefit of SB Plc UK, then these services cannot be treated as consumed in India as the beneficiary or recipient of these services is SB Plc, UK which is based outside India i.e. in U.K. Thus, I hold that it is wrongly alleged in the SCN that it is evident from the agreement that services have been consumed in India . 7. Learned Counsel for the respondents submits that the issue is no longer res integra as settled by a number of cases including the Larger Bench decision in the case of Arcelor Mittal Stainless India Pvt. Ltd. (supra), the Larger Bench has observed as follows: 43. It needs to be remembered that service tax is a value added tax which is a destination-based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is delivered outside India, and used outside India; and payment for such service provided outside India is received by the service provider in convertible foreign exchange. However, as the phrase delivered outside India in rule 3(2)(a) did not provide clarity with respect to intangible services, this expression was replaced w.e.f. 01.03.2007 by is provided from India and used outside India . The Circular dated 29.04.2009 issued by CBEC clarifies that the relevant factor is the location of the service receiver and not the place of performance and the phase used outside India is to be interpreted to mean that the benefit of the service should accrue outside India. The term used outside India , therefore, means that the service is provided to such a service recipient who is located outside India. It is the location of the servicerecipient which determines where the service is used. The use of intangible services should be seen with respect to the location of the service recipient and not the place of performance. 47. In the present case, Arcelor India is a sub agent of Arcelor France which is an agent for the steel mills situated outside India. For procuring sale orders for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not possible to accept this reasoning of the department. The Circular dated 24.02.2009 also categorically states that for the services to fall under rule 3(1)(iii) of the 2005 Export Rules, the relevant factor is the location of the service receiver. In other words, the place of performance of the service or the place where the customers of the service receiver are located is irrelevant. 52. As noticed above, it was the consistent view of the High Courts and the Tribunal that export of service would take place under rule 3(1)(iii) of the 2005 Export Rules if a person residing in India provides a service to a foreign entity to enable it to book orders for customers in India. This is for the reason that the foreign entity is located outside India and the payment is received by the person residing in India in convertible foreign exchange. 53. The division bench, while making the reference, intended to deviate from this settled position of law only because, in its considered view, the decision of the Supreme Court in GVK Industries. The division bench, after recording a finding that there was no dispute that Arcelor India was providing BAS to Arcelor France, noted that the dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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