Claim of Export Service Refund: CESTAT Remands Matter for Scrutinize FIRCs and individual invoices [Read Order]

The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal,( CESTAT ) remanded the matter regarding the claim of export service refund for scrutinising the Foreign Inward Remittance Certificate (FIRCs) and Individual Invoices. The claim was rejected for not fulfilling the export criteria under Rule 6A of Service Tax Rules, 1994.

Hannover Re Consulting Services India P. Ltd, the appellant had filed five claims for refund under Notification No.27/2012-CE(NT) dated 18.06.2012 on the ground that they had exported the output service without payment of service tax during the period from January 2016 to March 2017, enclosing various enclosures including copies of FIRCs and Bank statement, copies of input invoices and copies of ST-3 returns. 

The original authority rejected claims for not fulfilling the export criteria under Rule 6A of Service Tax Rules, 1994.  The original authority has held that the appellant was providing intermediary service and the same is not exported in terms of Rule 6A of Service Tax Rules, 1994. On appeal, the Commissioner (Appeals) held that the appellant is an intermediary and the place of provision of service will be determined under Rule 2(f) and Rule 9(c) and not under Rule 3 of Place of Provision of Service Rules, 2012.  He further held that the condition under Rule 6A of Service Tax Rules, 1994 was not satisfied.  Therefore, he did not interfere with the original order. 

The appellant is providing services to Hannover Ruchversicherung, Germany.  The said German company is in the business of reinsurance.  The clients of German companies are LIC, GIC etc.  The appellant is providing certain services to a German company which helps the German company to enhance its business and further elaborated that the appellant provides inputs about reinsurance markets in India, social, economic, political, legal and regulatory environments and key developments and events that may impact the business of German company in India. 

Further argued that in view of the nature of service provided by the appellant to the German company, the appellant can neither be classified as an intermediary nor can be held to be providing service within India.  He has submitted that the appellant is receiving consideration in convertible foreign exchange. 

The revenue submitted that the original authority has not decided the issue on merit by examining the individual invoices and FIRCs and, therefore, the matter may be remanded to the original authority.

A single-member bench of Mr Anil G Shakkarwar, Member (Technical) concluded that the activity is export of service.  Since the FIRCs and individual invoices were not scrutinized by the original authority, the matter needs to be remanded to the original authority.  For the said purpose, the impugned order needs to be set aside. 

The CESTAT set aside the impugned order and remanded the matter to the original authority with a direction not to raise the issue of export of service and process the said five claims by law and allowed the refund of the eligible amount to the appellant.

To Read the full text of the Order CLICK HERE

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