TMI Blog2015 (5) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order in respect of ₹ 1,64,081/- is upheld and the order rejecting refund of an amount of ₹ 10,98,077/- is set aside - Decided in favour of assessee. - Appeal No. ST/88549/2014 - Final Order No. A/1078/2015-WZB/SMB - Dated:- 16-4-2015 - Ramesh Nair, Member (J),J. For the Appellant : Shri Prasad Paranjape, Adv. For the Respondent : Shri A B Kulgod, Asstt. Commissioner (AR) ORDER Per: Ramesh Nair: The appeal is directed against Order-in-Appeal No: 575/PD/14 dated 29/04/2014 passed by the Commissioner of Central Excise Service Tax (Appeals - IV), Mumbai Zone - I wherein the learned Commissioner (Appeals) has upheld the rejection of refund claim amounting to ₹ 10,89,279/- on the ground that the appellant have not received the payment in convertible foreign exchange as the same was received in Indian rupees. Refund of ₹ 7,747/- and ₹ 1,051/- was also rejected in respect of security services and air travel services respectively on the ground that these services have no nexus with the Export of Services. However, an amount of ₹ 1,64,081/- was held to be admissible, if otherwise in order. 2. The issue involved in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k is not authorised to issue any FIRC. He submits that as per Notification No. FEMA 9/2000-RB dated 3rd May, 2000 issued by Reserve Bank of India under Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 it is provided that when a person receives in India, payment in rupees from the account of the bank or any exchange house situated in any country outside India, maintained with authorised dealer, the said person shall be deemed to have repatriated the realized foreign exchange to India. This establishes that even though the payment was received in Indian rupees but since the remittance has come from the country outside India and it was through the account of a bank, in the present case, it is Deutsche Bank, who is the authorised dealer, the payment shall be treated as convertible foreign exchange. 3.2. He also referred to Foreign Exchange Notification No. FEMA 14/2000-RB dated 03/05/2000 of Reserve Bank of India wherein, as per Regulation 3, Manner of Receipt in Foreign Exchange, the payment of any rupees from the account of a bank situated in any country other than Member country of Asian Clearing Union or Nepal or Bhutan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual is reproduced below: 3A.6 (i) Authorised dealers should issue certificates in form BCI against receipt of inward remittances or realisation of foreign exchange on security paper if the amount exceeds ₹ 15,000/- in value, bearing distinctive serial numbers and reference numbers. In case the amount of inward remittance or realisation of foreign exchange is upto ₹ 15,000/-certificates in form BCI with serial numbers and reference numbers may be issued on the letter-head of the authorised dealer (with their 'Logo' printed on it). Since inward remittances received for opening of or credit of Non-Resident (External) accounts/FCNR accounts can be repatriated freely, authorised dealers should not issue certificates against such remittances. 6. From the above provision it is clear that Foreign Inward Remittance Certificate (FIRC) is issued only in respect of foreign exchange. In the present case, FIRCs were issued and there is a specific certification that the payment has not been received in non-convertible rupees, which establishes that the payment received and mentioned in the FIRCs are other than non-convertible foreign exchange, in other words, the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) payment for all eligible current transactions by debit to the Asian Clearing Union dollar account in India of a bank of the member country in which the other party to the transaction is resident or by credit to the Asian Clearing Union dollar account of the authorised dealer maintained with the correspondent bank in the member country; and b) payment in any permitted currency in all other cases (2) all countries other than those mentioned in (1). a) payment in rupees from the account of a bank situated in any country other than a member country of Asian Clearing Union or Nepal or Bhutan; or b) payment in any permitted currency (2) In respect of an export from India, payment shall be received in a currency appropriate to the place of final destination as mentioned in the declaration form irrespective of the country of residence of the buyer. 7. From the above regulation and serial No. (2) of the Table, it is very clear that the payment in rupees from the account of a bank situated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to approve the agreements of the appellant with M/s Sedgwick offshore Resources Ltd. London for the purposes of section 80-0 of the Income-tax Act, are improper and illegal. We declare so. we direct the respondent to process the agreements in the light of the principles laid down by us herein above. The appeal is allowed. There shall be no order as to costs. 9. From the above judgment it is observed that out of the total payment to be made by the insurance broker in India to the foreign insurer was reduced to the extent of his brokerage and remaining amount was remitted to foreign insurer in the foreign exchange. The issue was whether the brokerage in Indian rupees retained by the Indian Insurance broker shall be treated as foreign exchange or otherwise. The hon'ble Supreme Court has held that the said amount of brokerage retained by the Indian insurance broker from the total amount due to the foreign insurer shall be treated as foreign exchange. In view of the above judgment, I am of the view that when a foreign bank is maintaining Indian rupees in their account obviously, such Indian rupees was obtained in lieu of foreign exchange. For example, if any payment is made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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