2013 (8) TMI 800 - AT - Service Tax

Refund Claim - Export of services - booking orders for the foreign supply for supply of goods in India - Held that - The adjudicating authority had rejected the refund claims only on the ground that the said refund would not fall under the category of Export of Services Rules 2005 and hence Rule 5 will not be applicable was incorrect conclusion - The assesse was entitled to refund under Rule 5 on the Service tax paid by them in respect of export of business auxiliary service - exemption was admissible to the assessee in respect of business auxiliary service exported by them. The benefit of such export was derived by the recipient located outside India and was utilized outside India - M/s. Em Jay Engineers Versus Commissioner of Central Excise Mumbai 2010 (5) TMI 221 - CESTAT MUMBAI and KSH International Pvt. Ltd. Versus Commissioner of Central Excise Belapur 2010 (1) TMI 143 - CESTAT MUMBAI - assesse was directed to file the declarations as required under Notification No. 12/2005 read with Export of Services Rules 2005 before the adjudicating authority and the adjudicating authority on receipt of such declaration will process refund claims Order set aside Decided in favor of assesse.

Summary

Issues:
Refund claim eligibility under Notification No. 11/2005 and 12/2005 for service tax paid on commission received in convertible foreign exchange.

Detailed Analysis:
The case involved two appeals against orders dated 16-3-2011, concerning a refund claim of service tax paid by the appellant between 13-4-2006 to 9-2-2007 under the category of "Business Auxiliary Service." The appellant, a marketing agent for foreign suppliers, claimed that they were not liable to pay service tax under this category. The first appellate authority rejected the appeals based on the timing of the refund claim.

The appellant argued that the service tax liability was discharged voluntarily and claimed eligibility for refund under Notification No. 11/2005 and 12/2005. They cited precedents like Em Jay Engineers and KSH International Pvt. Ltd. to support their position that commission received in foreign exchange for procuring orders in India qualifies as export of services.

The Tribunal found that the appellant had paid tax on export of services eligible for refund under Notification No. 12/2005 and Export of Services Rules, 2005. Referring to the cases of Em Jay Engineers and KSH International Pvt. Ltd., the Tribunal emphasized that the benefit of services accruing outside India fulfills the export criteria, contrary to the lower authorities' views.

The adjudicating authority's rejection of the refund claims based on the location of service delivery and usage was deemed incorrect in light of established case laws. The Tribunal highlighted the procedural nature of filing declarations under Rule 5 and Notification No. 12/2005, with the ability to condone any delays. Ultimately, the Tribunal ruled in favor of the appellant, directing them to file necessary declarations for processing the refund claims.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeals, emphasizing the appellant's eligibility for refund of service tax paid on commission received from foreign suppliers. The procedural aspect of filing declarations was underscored for further processing of the refund claims.