M/s Import Express India P Ltd. Versus Commissioner of CGST, Mumbai Central
Service Tax
2018 (10) TMI 900 – CESTAT MUMBAI – 2020 (38) G. S. T. L. 40 (Tri. – Mumbai)
CESTAT MUMBAI – AT
Dated:- 10-10-2018
ST/86872/2018 – A/87580/2018
Service Tax
Shri Ajay Sharma, Member (Judicial)
For the Appellant : Shri Rajiv Luthia, Chartered Accountant
For the Respondent : Shri O M Shivdikar, Assistant Commissioner (AR)
ORDER
Per: Ajay Sharma
The instant appeal has been filed from the Order-in-Appeal No. CD/TR(Appeal)/MC/43/2017-18 dated 20th February 2018.
2. The appellant herein is 100% subsidiary of SHOP YOUR WORLD PTE LTD, SINGAPORE (hereinafter referred as “Parent Company”). The Parent Company sells their products to their customers in India. A Service Agreement dated 18th August 2010 was entered into between the Appellant and its Parent Company. The Appellants are providing various services categorised under “Business Auxiliary Services” to their Parent Company, such
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ers made online payment to the Parent Company for the products purchased by them but many times they made payment for the Parent Company's products to the Appellant in India and the appellant in turn after deducting their service charge/commission in term of Clause 4 of the Service Agreement, transfer the remaining amount to the Parent Company at Singapore through banking channel. In other words, the Appellant remits the net charge to the Parent Company after deducting its service charges/commission. For the period from July, 2011 to September, 2011 the Appellant had filed refund claim of Rs.5,09,803/- under the Export of Service Rules, 2005 for rebate of Service Tax paid on export of services. The same was rejected by the Adjudicating Authority vide Order-in-Original dated 19th January 2016. On appeal, the Learned Commissioner GST & Central Excise, Thane (Rural), Mumbai vide the impugned order dated 20th February 2018, also dismissed the same.
4. I have heard Learned Chartered Accoun
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the decision of the Tribunal (Principal Bench, Delhi) in the matter of National Engineering Industries Ltd. Vs. CCE, Jaipur (2008) TIOL 939 wherein this Tribunal has held that receipt of consideration received in Indian Rupees in lieu of foreign exchange is eligible for benefit of exemption under Export of Service Rules, 2005. The above mentioned decision has also been followed by this Tribunal in the matter of Pam Pharma & Allied Machinery Co. Pvt. Ltd. Vs. CST, Mumbai – (2015) (7) TMI 755 in which this Tribunal while holding that the Appellant has complied with conditions of Export of Services Rules, 2005, granted refund to the appellant. He also relied upon the decision of Chennai Bench of this Tribunal of in the matter of Arafaath Travels Pvt. Ltd. Vs. CST, Chennai reported in 2017 (7) GSTL 437 (Tri.-Chennai) in which it has been held that procedure of retaining the serviced charge/commission amount and only remitting the remaining portion of the proceeds will have to be necessaril
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– TIOL-2578-SC-IT while interpreting convertible foreign exchange under the provisions of Income Tax Act has laid down that brokerage income retained by the assessee acting as agent of foreign reinsurer, out of the premium collected from the ceding insurance company in India and remitting the balance to the foreign insurer in foreign exchange, can be said to be the income in convertible foreign exchange and hence qualify for deduction under section 80-O of the Income Tax Act.
7. Rule 3[2] of Export of Service Rule, 2005 for the non-compliance of which, the Appellant's claim has been rejected by the authorities below is stated as under:-
“Rule 3(2) of “Export of Services” Rule, 2005
“(2) the provision of any taxable service specified in sub-rule (1) shall be treated as export of service when the following conditions are satisfied namely:-
(a) (****)
(b) Payment for such service is received by the service provider in convertible foreign exchange.”
8. Although Rule 3(2) requires
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