3/14/2017 CSTVsGREATERPACIFICCAPITALINDIAPVTLTDTIOL

2014TIOL1726CESTATMUM

INTHECUSTOMS,EXCISEANDSERVICETAXAPPELLATETRIBUNAL
WESTZONALBENCH,MUMBAI
COURTNO.II

ApplicationNos.ST/COD/97242,97244,97246,97248/13
ST/S/97243,97245,97247,97249,95480/13
AppealNos.ST/88129,88130,88131,88132,87101/13

ArisingoutofOrderinAppealNo.179to183Dated:23.12.2012
PassedbytheCommissionerofCentralExcise&ServiceTax(Appeals)MumbaiI

DateofHearing:26.3.2014
DateofDecision:25.4.2014

COMMISSIONEROFSERVICETAX,MUMBAI

Vs

M/sGREATERPACIFICCAPITALPVTLTD

AppellantRepby:ShriRakeshGoyal,Addl.Commissioner(A.R)
RespondentRepby:ShriBharatRaichandani,Adv.

CORAM:AshokJindal,Member(J)

CENVATRefundNotfn.5/2006CE(NT)Respondentisengagedinprovidinginvestment
advisoryservicestoGreaterPacificCapitalLLPlocatedoutsideIndiaanddoesnothaveany
businessinIndiarefundclaimsfiledforunutilizedaccumulatedCENVATcreditonaccountof
paymentofservicetaxoninputserviceswhichwereusedforprovidingoutputserviceswhich
were exported by them adjudicating authority partly rejected claim on the ground that
servicesprovidedbyrespondentwereultimatelyusedinIndiabyinvestingamountsonthe
advise of the respondent by GPC and, therefore, service is used in India and refund is not
admissible as per Circular 141/10/2011TRU Commr(A) setting aside order and allowing
refundclaimappealtoCESTAT

Held:Itisanadmittedfactthattherespondenthasprovidedinvestmentadvisoryserviceto
GPCManagementlocatedoutsideIndiaanddoesnothaveanybusinessinIndia.Itisalsonot
indisputethattherespondenthasreceivedthepaymentinconvertibleforeignexchangein
view of the facts involved and the Tribunal decision in Paul Merchants & Vodafone Essar
CellularLtd.itisacaseofexportofservicerespondententitledfortherefundclaimOinA
upheldRevenueappealdismissed:CESTAT[Para10]

Revenueappealdismissed

Caselawscited

SuchitraComponentsLtd.2007TIOL09SCCXpara7referred

PaulMerchantsLtd.2012TIOL1877CESTATDELpara7,10reliedupon

VodafoneEssarCellularLtd2013TIOL566CESTATMUMpara10reliedupon

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ORDERNO.A/834838/14/SMB/CIV
S/460464/14/SMB/CIV
M/436439/14/SMB/CIV

Per:AshokJindal:

TheRevenuehasfiledtheseappealsagainsttheimpugnedorderalongwithapplicationsforstayof
operation of the impugned orders. The Revenue has also filed the applications for Condonation of
Delayinfilingtheappeals.

2. The contention of the Revenue is that against the impugned order, the Revenue filed one
composite appeal within time but on pointing out by the Registry that separate appeals have to be
filed against each order therefore, there is a delay of 83 days in filing appeals. Considering the
reason for causing delay as stated by the learned A.R. is satisfactory, I condone the delay in filing
theappealsandallowtheCODapplications.

3. Both the sides prayed that the appeals be decided finally along with stay applications and I also
feltthattheappealsthemselvescouldbedecidedatthisstage.Therefore,consideringtherequestof
bothsides,Itakeuptheappealsaswellasstayapplicationstogetherforfinaldisposal.

4. Brief facts of the case are that the respondent is engaged in providing investment advisory
services to their foreign service receiver. The respondent filed refund claims for unutilized
accumulatedCENVATcreditonaccountofpaymentofservicetaxoninputserviceswhichwereused
for providing output services which were exported by them. The adjudicating authority partly
rejected on the ground that the respondent has failed to prove that input services in question have
been used in providing output service as per Notification 5/2006CE dated 14.06.2006. The said
order was challenged before the learned Commissioner (Appeals) who hold that the refund claim is
admissibletotherespondent.AggrievedbythesaidordertheRevenueisbeforeme.

5.Heardbothsides.

6.ThelearnedA.R.appearingfortheRevenuesubmitsthatinthiscasetherespondentisengagedin
the business of providing investment advisory services. The respondent had entered into an
agreement with M/s Greater Pacific Capital LLP (GPC) who is located outside India. The respondent
wereprovidingtheminvestmentadvisoryservicesandthoseservicesareultimatelyusedinIndiaby
investing amounts on the advise of the respondent by GPC therefore, the service has been used in
India. In that case there is no export of service therefore, refund claim is not admissible to the
respondentasperCBECCircularNo.141/10/2011TRUdated13.05.2011.

7. On the other hand, the learned Counsel appearing on behalf of the respondent opposed the
contention of the learned A.R. and submits that as per the agreement, the respondent were to
advise about the investment, disinvestment and reinvestment of the assets of the Fund and to
arrangeinvestmenttransactionstobeenteredintobyoronbehalfofthefund.Itisfurtherprovided
thatGPChasestablishedthecompanytoobtaininformationandundertakeresearchandanalysisin
relationtoinvestmentprospectsinIndiasoastoenableGPCtoprovidecomprehensiveinvestment
advice to GPC Management. The work done by the respondent will be limited to preparatory work
consistingprimarilyofresearchandanalysisinrespectofinvestmentproposals.Therefore,interms
of the said agreement, the respondent shall undertake such research and analysis of investment
proposals in India as GPC may request to enable GPC to advice GPC Management as to the
investmentandreinvestmentoftheassetsinthefund.Inthesecircumstances,therespondenthad
provided the service to GPC located outside India who does not have any business in India. The
respondent has received the payment in convertible foreign exchange for providing the said
services. The respondent has received various input services used for export of services. As the
respondent was not in a position to utilize credit of service tax paid on input services, they filed
claims for refund of service tax paid on input services in terms of Rule 5 of CENVAT Credit Rules,
2004, read with Notification No.5/2006CE. Therefore, the question, whether the services provided
by the respondent to GPC located outside India qualify as export of service in terms of Rule 3(1)
(iii)andRule3(2)readwithRule4oftheExportofServiceRules,2005ornotandtherespondentis
entitledforrefundofaccumulatedCENVATCreditunderRule5oftheCENVATCreditRules,2004.It
isfurthercontendedthatastherespondenthasprovidedtheseservicestoGPClocatedoutsideIndia
andthoseserviceshavebeenutilizedthereontherefore,theyqualifyunderthecategoryofRule3(1)
(iii) for Banking and other Financial Services, therefore, they are entitled for refund claim. He
further submits that the CBEC Circular No. 141/10/2011TRU dated 13.05.2011 is not applicable to
the facts of this case as the refund claim pertains to the period prior to the issue of the said
Circular.ThelearnedAdvocatefurthersubmitsthattheCircularisapplicableprospectivelyonlyand
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cannotbeappliedforthepastperiodtodenyrefundasheldbythecaseofSuchitraComponentsLtd.
2007(208)ELT321(SC) 2007TIOL09SCCX.HefurthersubmitsthatinthecaseofPaul Merchants
Ltd. 2013 (29) STR 257 2012TIOL1877CESTATDEL, this Tribunal, after considering the Circular
issuedin2011insimilarcircumstancesheldthattheassesseeareentitledforrefundclaim.

8.Consideredthesubmissionsmadebyboththesides.

9. In this case the issue is to be decided whether the services provided by the respondent to GPC
located outside India qualifies as export of service as per Rule 3(1)(iii) read with Rule 4 of the
Export of Services Rules, 2005 or not and consequently, whether the respondent is entitled for
refundclaimornot.

10. It is an admitted fact that the respondent has provided investment advisory service to GPC
ManagementlocatedoutsideIndiaanddoesnothaveanybusinessinIndia.Itisalsonotindispute
the respondent has received the payment in convertible foreign exchange. Therefore, as per Rule
3(1)(iii) of the above said Rule, the services provided by the respondent not qualifies as export of
service as the service provided by the respondent to a service recipient located outside India and
are to be used outside India for their benefit. Further, I find that the issue came up before this
TribunalinthecaseofPaulMerchantsLtd.(supra)andinthatcasealsothisTribunalhasheldthatif
theservicesrecipientislocatedoutsideIndiaandthesamehasbeenutilizedoutsideIndia,therefore
itisacaseofexportofservice.FurtherinthiscaseofVodafoneEssarCellularLtd2013(31)STR
738 2013TIOL566CESTATMUMthis Tribunal held that telecom services provided to inbound roaming
international consumers would qualify as export of service. In the said case, Vodafone provided
telecomservicesinIndiatointernationalinboundroamersregisteredwithforeigntelecomnetwork
operatorsbutlocatedinIndiaatthetimeofprovidingofthesaidservices.InthatcasethisTribunal
heldthatVodafonerenderedthetelecomservice,inthecontextofinternationalroaming,thebenefit
accruedtotheforeigntelecomserviceprovider,thoughtheactualconsumerwasinIndiabutinthat
case it was held that it is a support service. In the instant case, the respondent has provided
investment advisory services to GPC who is located outside India and having no office in India. In
that case it is held that it is a case of export of service. In the circumstance, the respondent is
entitled for the refund claim. Accordingly, I do not find any infirmity with the impugned order and
thesameisupheld.AstheappealsfiledbytheRevenuedeservesnomeritaretherefore,dismissed.
Stayapplicationisalsodisposedofintheaboveterms.

(PronouncedinopenCourton25.4.14)

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