Order Date – 14 June 2022

Facts :

• The appellants, M/s Manav Marketing Private Limited, are engaged in providing Business Support Service and Management and Repair Service.
• The appellants entered into an agreement with a USA based company HAAS and received payment towards the service so rendered to the foreign company in foreign exchange. Claiming that the services rendered by them are export of services and are not liable to service tax, the appellants filed two refund claims for the years 2006-07 & 2007-08 and 2008-09.
• Revenue has issued show cause notices and rejected the refund claims on the ground that the activities undertaken by the appellants are not export and the refund claims are also hit by limitation, the appellants misrepresented that the services rendered by them are “Business Support Services” whereas it is clear from the bills raised that they are “Machine Commissioning Charges”. 
• On appeal, the Commissioner has upheld the orders of the lower authority. Aggrieved, Appellant filed this appeal.

Issue:

• Whether the services rendered by the appellants can be considered as export of services and as to whether the refund claims are hit by limitation?

Order:

• The authorities, after analyzing the bills, observed that most of the amount received by the appellants appears to be for machine commissioning charges, office maintenance charges and commission. In respect of reimbursed office expenses, the Tribunal did not find any service aspect in the same. Even if one assumes that it is a service rendered by the appellant, it is a service rendered to themselves. Therefore, the Tribunal found that the service tax is not leviable.
•  In respect to the issue of commission received by the appellants, the Tribunal prima facie found that there is an element of service and the same appears to have been rendered to the overseas principals.
•  In view of the above, we are of the considered opinion that the appellants are not required to pay service tax on the amounts received by them by way of „Office Expenses‟ and „Commission‟.
• In case of machine commissioning charges, the Tribunal observed that the appellant is a service provider and the Indian purchaser of the machine is the service recipient. The appellant may have rendered the service as an agent of his overseas principals and may have received the consideration from them towards such service. Service tax being “Destination Based Consumption Tax”, as the service is rendered and consumed in the country, the service cannot be said to have been exported and hence doesn’t come under the purview of exported services.
• The Tribunal denied contentions of the petitioner that Section 11B is not applicable when any tax is paid under mistake by relying on the judgement of Madras High Court in the case of M/s M.G.M International Exports Ltd. Vs The Assistant Commissioner of Service tax, Chennai, and held that “the refund of tax if any borne by the petitioner had to be made only within a period of limitation prescribed under Section 11B of the Central Excise Act, 1944”.
• Therefore, relying on the above findings the court partly allowed the appeal.