TMI Blog2019 (4) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... to foreign clients either in foreign exchange or in Indian Rupees (for Nepal customer). Evidently, the payment for taxable services provided to foreign clients have been received and such amounts cannot be charged to service tax, since they are in the nature of Export of Services . It is on record that the appellant has made certain remittances in foreign currency for purchase of software licences and other expenses connected with providing services to foreign clients. We are of the view that such remittances will not incur the mischief of the proviso in Notification Nos.6/99 21/03 - In any case, the appellant was fully entitled to make remittances in foreign exchange outside the country for legitimate business expenses as permitted by RBI from time to time. In the result, we find no justification to order payment of service tax on the export proceeds. CENVAT Credit - duty paying documents - credit is denied for the reason that this has been availed on the basis of photo copies of the original documents - HELD THAT:- There are no allegations have been made by the Revenue of any fraud or mis-use. No doubts have been cast on the authenticity of the photo copies based on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Rupees. The Department noticed that the appellant did not pay service tax on this amount received from foreign clients and the service tax due on such amount was proposed for recovery in the show-cause notice. 2.4 It was noticed by the Department that the appellant had availed cenvat credit of certain service tax paid, which was felt was not allowable for the following reasons : (i) Cenvat credit was taken in many cases on the basis of photo copies of the relevant bills. All the original bills were said to be available in the regional office of the appellant. (ii) Certain bills were not in the name of the appellant. It was mentioned as IMRB International . The correct name of the appellant was Indian Market Research Bureau . Some more amounts were also alleged to have been wrongly availed in respect of certain services not qualifying as input service . The demand made in the show-cause notice dated 21.03.2005 is summarized below : Sl.No. Point on which demand raised Amount of tax (Rs.) 1. Non-payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Hon ble Supreme Court in the case of Union of India Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. reported in 2018 (10) GSTL 401 (SC) (Para 24 29). He submitted that the Apex Court has held that in terms of Section 67 of Finance Act, 1994, there is no scope for including reimbursable expenses for providing such services. Finally, he submitted that the demand for service tax on this ground may be set aside.. 4.2 Non-payment of service tax on certain foreign currency Receipts from other foreign clients He submitted that in respect of services provided to foreign clients, the consideration was received in foreign exchange in respect of the countries other than Nepal. In respect of clients situated in Nepal, the consideration was received in Indian Rupees. Since the entire consideration (where receipts in foreign currency or Indian Rupees from Nepal) is the payment for taxable services to foreign clients and these are in the nature of Export of Services, no service tax will be liable to be paid on such receipts. In this connection, he referred to the Notification No.6/99-ST dated 09.04.1999 (rescinded on 28.02.2003) which granted ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for the period 01.10.1999 to 28.02.2003 and 20.11.2003 to 31.03.2004, service tax would not be applicable on the foreign exchange receipts whether the Notification Nos.6/1999-ST and 21/2003-ST existed or not. Hence the appellants need not take recourse to the exemption notification to claim immunity from payment of service tax on the foreign currency receipts. Hence, demand of ₹ 47,89,548/- on the foreign currency receipts is not payable. (vii) He submitted that substantial part of the cenvat credit denied is for the reason that the credit was taken on the basis of photo copies of the documents and the originals were not available in their office at Kolkata for verification. In this connection, he submitted that all the cenvat credits were taken on the basis of valid documents. In certain cases, the original set of documents were retained at the respective regional office. To support his contention, he relies on the following case laws : (a) Shivam Electrical Industries Vs. Union of India : 2018 (359) ELT 46 ( J K) ; (b) CCE Vs. JSW Steels Ltd. : 2011 (265) ELT 50 (Tri.-Che.) (c) Pepsico India Holding Pvt. Ltd. Vs. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question whether such reimbursable expenses should form part of the taxable value has been decided by the Hon ble Supreme Court in the case of Intercontinental Consultants Technocrafts Pvt. Ltd. (supra). The Hon ble Apex Court, after detailed discussions, has held that the value of taxable services in terms of Section 67 does not include reimbursable expenses for providing such service until May, 2014-15, when Section 67 was suitably amended to make provision for the same. The observation of the Hon ble Apex Court is reproduced below : 29. In the present case, the aforesaid view gets strengthened from the manner in which the Legislature itself acted. Realising that Section 67, dealing with valuation of taxable services, does not include reimbursable expenses for providing such service, the Legislature amended by Finance Act, 2015 with effect from May 14, 2015, whereby Clause (a) which deals with consideration is suitably amended to include reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service. Thus, only with effect from May 14, 2015, by virtue of provisions of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1] , a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing law. The obvious basis of the principle against retrospectivity is the 29. principle of fairness , which must be the basis of every legal rule as was observed in L'Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties. In any case, we shall refer to few judgments cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.6/99 21/03 (supra). In this regard, we are guided by the intention of the Government not to tax Export of Services . In any case, the appellant was fully entitled to make remittances in foreign exchange outside the country for legitimate business expenses as permitted by RBI from time to time. In the result, we find no justification to order payment of service tax on the export proceeds. This view finds supports in the various decisions cited by the appellant. In particular, we refer to the decision of the Tribunal in the case of SGS India Ltd. (supra), in which the Tribunal has observed as under : 8. The view taken by the Central Board of Excise and Customs vide Circular No. 66/2005-S.T., is that export of services would continue to remain tax-free even after withdrawal of Notification No. 6/94-S.T., dated 9-4-1999. The Board was examining the effect of withdrawal of Notification No. 6/99-S.T. This Notification exempted the taxable service specified in Section 65(48) of the Finance Act, 1994 provided to any person, in respect of which payment was received in India in convertible foreign exchange, from payment of service tax. The Notification, in a proviso, lai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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