Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2015 (10) TMI 2411

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 15 - Mr. Ramesh Nair, Member (Judicial) Ms. Rinky Jassuja, Chartered Accountant : For the Appellants Shri A.B. Kulgod, Asstt. Commissioner (A.R.) : For the Respondent ORDER Per : Ramesh Nair This appeal is directed against Order-in-Appeal No. PD/ST-I/531/2014 dtd. 23/4/2014 passed by the Commissioner of Central Excise Service Tax (Appeals-IV), Mumbai-I, wherein the Ld. Commissioner (Appeals) rejected the appeal of the appellant. 2. The fact of the case is that appellant M/s. AGM India Advisors Pvt. Ltd are registered with service tax department under the category of Management Consultants services. The appellant filed refund claim of ₹ 17,66,363/- on the ground that they have exported management consultant services without payment of service tax under Rule 4 of the Export of Services Rules, 2005 and they are not in a position to utilize the Cenvat Credit availed by them. On scrutiny of the said refund claim, the department observed that the appellant have not received export proceeds in convertible foreign currency but received the same in Indian rupees only. The department also observed that the appellant have availed Cenvat credit on Clearing .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ven classifying the same services under management consultancy services, the department in earlier claims has been considering their refund accepting classification as above. She referred the judgment of this Tribunal in their own case which was passed vide order no. A/1076/15/SMB dated 16/4/2015, wherein the services has been claimed under management or business consultant services and same has not been disputed therefore the services exported by them is management consultant services and not banking and financial services. Therefore dispute raised by the lower authority is not sustainable. 4. Shri A.B. Kulgod, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. 5. I have carefully considered the submissions made by both sides and perused the record. 6. I find in the present case fact is that services have been exported by the appellant, the payment was received by them in Indian rupees but through foreign bank namely Bank of America. FIRC in respect of foreign remittance was issued by the bank. In FIRC this clearly stated that payment has not been received in non convertible rupees or under any special trade o .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... debt or liability denominated in foreign exchange to the extent and in the manner specified by the Reserve Bank. (2) A person shall be deemed to have repatriated the realised foreign exchange to India when he receives in India payment in rupees from the account of a bank or an exchange house situated in any country outside India, maintained with an authorised dealer. From the sub-para (2) of para 4 above it is very clear that, when a person receives in India payment in rupees from the account of a bank situated in any country outside India maintained with an authorised dealer, the payment in rupees shall be deemed to have repatriated the realized foreign exchange to India. In the present case, the payment in Indian rupees was received from foreign country through Deutsche Bank. Therefore, the said Indian rupee is nothing but foreign exchange repatriated from foreign country to India. Therefore, such payment in rupees is equal to the foreign exchange. The manner of receipt of foreign exchange is provided under Notification No. FEMA 14/2000-RB dated 03/05/2000 issued by Reserve Bank of India. Regulation No.3 of the said Notification is reproduced below: 3. Manner of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... brought out in this case, are clear as to how the remittance to the foreign reinsurance company is made through the Reserve Bank of India in conformity with the agreement between the appellant and the foreign reinsurer, and that the remittance that the amount due to the foreign re-insurers as also the brokerage due to the appellant and the balance due to the foreign reinsurer is remitted (and expressed so) in dollars. It is common ground that the entire transaction effected through the media of the Reserve Bank of India is expressed in foreign exchange and in effect the retention of the fee due to the appellant Is dollars for the services rendered. This, according to us, is receipt of income in convertible foreign exchange. It seems to us that a two way traffic , is unnecessary. To insist on a formal remittance to the foreign reinsures first and thereafter to receive the commission from the foreign reinsurer, will be an empty formality and a meaningless ritual, on the facts of this case. On a perusal of the nature of the transaction and in particular the statement of remittance filed in the Reserve Bank of India regarding the transaction filed in the Reserve Bank of India regardi .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ame. However, same are need not be discussed, in view of my above discussion and the statutory provisions of the Foreign Exchange Management Act and hon'ble Supreme Court's judgment, I am of the considered view that even though the appellant received the payment in Indian rupees but the same is deemed to be convertible foreign exchange and accordingly the condition as provided under Rule 3(ii) of Export of Service Rules, 2005 stand complied with. The appellant filed the appeal in respect of the total amount of ₹ 12,62,158/-. However, from the Order-in-Appeal, I find that an amount of ₹ 1,64,081/- was held as admissible. Therefore, the appellant should not be aggrieved with this part of the amount. 11. On the other issues of admissibility of input service credit in respect of security services and air travel services, first of all, this issue of admissibility as input service was not raised in the show cause notice. Therefore, denial of refund of ₹ 7,747/- and ₹ 1,051/-respectively is not correct. Secondly, the appellant is providing export services and for which they are using security services and air travel services, which in my view, has a dire .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates