TMI Blog2018 (3) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... not been received in convertible foreign currency for export of services by the appellant. Appeal allowed- decided in favor of appellant. - Application(s) Involved: ST/MISC/20169/2017, ST/MISC/20170/2017, ST/MISC/20171/2017, ST/MISC/20962/2017, ST/MISC/20172/2017, ST/MISC/20173/2017, ST/MISC/20174/2017, ST/MISC/20175/2017, ST/MISC/20176/2017 in ST/20364/2015-DB, ST/20365/2015-DB - Final Order No. 20227-20235 / 2018 - Dated:- 14-2-2018 - MR. S.S GARG, JUDICIAL MEMBER AND MR. V. PADMANABHAN, TECHNICAL MEMBER ST/20366/2015-DB, ST/20367/2015-DB, ST/20368/2015-DB, ST/20369/2015-DB, ST/20370/2015-DB, ST/20371/2015-DB, ST/20372/2015-DB And Appeal(s) Involved: ST/20364/2015-DB, ST/20365/2015-DB, ST/20366/2015-DB, ST/20367/2015-DB, ST/20368/2015-DB, ST/20369/2015-DB, ST/20370/2015-DB, ST/20371/2015-DB, ST/20372/2015-DB Mr. Sahilendra Sukhlecha, CA, For the Appellant Dr. Ezhilmathi, AR, For the Respondent Per: V. PADMANABHAN The present set of miscellaneous applications has been filed by the appellant for change of name in the cause title from Novell Software Development (India) Pvt. Ltd. to Micro Focus Software India Pvt. Ltd . After going through the miscell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Foreign Inward Remittance Certificate . Clause 3A.6(i) of the Exchange Control Manual 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... desh. Islamic Republic of Iran, Myanmar, Pakistan and Sri Lanka (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 acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es dated 11-3-1986, declining 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate R-Return (VOSTRO) for each currency is required to be submitted irrespective of number of accounts operated upon in that currency . 10. One more important aspect to be noted here is that the receipt of consideration for the disputed services is admitted. However, the source of amount is questioned by Revenue. It is manifestly clear that the amount credited to the account of the appellant in India is in consequence of a debit of pound sterling account maintained by participated bank in nostro mechanism in UK. The said debit of foreign exchange by the UK bank and consequent credit in Indian rupee in Indian bank as part of nostro transaction is reported to RBI and necessarily forms part of foreign exchange earning in India. In other words, the amount has not reached India from UK in Indian rupees. 11. In view of the detailed analysis, as above and decided cases in similar set of facts, we find no merit in the findings by the lower authority to the effect that foreign exchange has not been received in convertible foreign currency for export of services by the appellant. 12. On the second issue, a plain reading of the statutory definition for programme producer service mak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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