Commissioner Of Service Tax Iii Mumbai vs M/S Vodafone India Ltd

2025 INSC 914 NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.10815-10819/2014

COMMISSIONER OF SERVICE TAX-III, MUMBAI APPELLANT

VERSUS

M/s. VODAFONE INDIA LIMITED RESPONDENT

WITH

CIVIL APPEAL NO.5252 OF 2015

CIVIL APPEAL NO.5307 OF 2015

CIVIL APPEAL NO.6556 OF 2015

CIVIL APPEAL NOS.2402-2403 OF 2016

CIVIL APPEAL NOS.571-572 OF 2016

CIVIL APPEAL NO.10885 OF 2016

CIVIL APPEAL NO.3692 OF 2017

CIVIL APPEAL NO.1469 OF 2017

CIVIL APPEAL NO.9152 OF 2017 Signature Not Verified

Digitally signed by RADHA SHARMA Date: 2025.07.31 13:54:39 IST Reason:

Page 1 of 53 CIVIL APPEAL NO. 4009 OF 2018

CIVIL APPEAL NOS. OF 2025 (Arising out of SLP(C) Nos.25413-25414 & 25416 of 2018)

CIVIL APPEAL NOS.8045-8046 OF 2018

CIVIL APPEAL NO.9140 OF 2018

CIVIL APPEAL NO.10349 OF 2018

CIVIL APPEAL NO.9745 OF 2018

CIVIL APPEAL NO.10071 OF 2018

CIVIL APPEAL NOS.11837-11838 OF 2018

CIVIL APPEAL NO.1440 OF 2019

CIVIL APPEAL NO. OF 2025 (Arising out of SLP(C) No.10281 of 2019)

CIVIL APPEAL NO.4959 OF 2019

CIVIL APPEAL NO.7483 OF 2019

CIVIL APPEAL NOS.9008-9009 OF 2019

CIVIL APPEAL NO. OF 2025 (Arising out of SLP(C) No. of 2025 arising out of Diary No.38417 of 2019)

CIVIL APPEAL NO.2634 OF 2020

CIVIL APPEAL NOS.3546-3549 OF 2020

Page 2 of 53 CIVIL APPEAL NO. OF 2025 (Arising out of SLP(C) No. of 2025 arising out of Diary No.24028 of 2020)

CIVIL APPEAL NO.2424/2022

CIVIL APPEAL NO. OF 2025 (Arising out of SLP(C) No.26382 of 2023)

CIVIL APPEAL NOS.12468-12471 OF 2024

JUDGMENT

NAGARATHNA, J.

Delay condoned.

Leave granted.

1.1 These Civil Appeals have been filed by the Revenue, i.e. the

Service Tax Department, being aggrieved by various orders passed

by the Customs, Excise and Service Tax Appellate Tribunal

(“CESTAT”, for the sake of convenience).

2. The orders passed by CESTAT in all these appeals have been

in favour of the respondents-assessees. The CESTAT has held that

the services provided by the respondents-assessees have been in

Page 3 of 53 fact exported out of India. Consequently, service tax is not payable

by the assessees on such services so exported, vide Rule 4 of the

Export of Service Rules, 2005 (“Rules”, for the sake of brevity). It

has also held that the assessees had rightly availed payment of

CENVAT credit on inputs and input services used for providing

such services vide Rule 5 of the Rules.

3. The period under consideration in these appeals range from

the year 2003 till the year 2014. During this period, there were

several amendments made to the law governing the taxability of

export of services, which can be discussed at this stage itself.

4. The policy governing taxability of export of service was

initiated in the year 1999 and in the year 2003, it was reiterated.

Since service tax is a destination-based consumption tax, services

that were exported out of India were not meant to be taxed. The

benchmark in the year 1999 was, whether payment was received in

convertible foreign exchange. Ultimately, in the year 2010, the

benchmark again came to be fixed as receipt of payment in

convertible foreign exchange.

Page 4 of 53 5. A brief outline of the amendments made from the year 1999

till 2012 are highlighted as under:

I. From 1999 to 2003:

5.1 During the period from the year 1999 to 2003, any taxable

service for which payment was received in convertible foreign

exchange was exempted from payment of service tax. A notification

in this regard was issued vide Notification No.6/99-S.T., dated

09.04.1999, whereby exemption was made in respect of the taxable

services specified in sub-section (48) of Section 65 of the Finance

Act, 1994. This Notification was however rescinded vide Notification

No.2/2003-Service Tax, dated 01.03.2003, the reason being that

the exemption would be of no consequence as whatever service was

exported out of India was in any case outside the scope of levy of

service tax. This was because service tax is location-based and

whatever service is exported abroad, is outside the scope of service

tax. Consequently, Circular No.56/5/2003-S.T., dated 25.04.2003

was issued, clarifying that since service tax is destination-based

consumption tax, no such tax was leviable on export of services.

Page 5 of 53 5.2 Subsequently, Notification No.21/2003-S.T., dated 20.11.2003

was issued, providing exemption from payment of service tax on

export of services in terms of sub-section (105) of Section 65 of the

Finance Act, 1994, provided taxable services to any person in

respect of which payment is received in India is received in

convertible foreign exchange.

5.3 When the position stood thus, the Government of India

decided to formulate Rules regarding export of services.

II. From 2005 to 2010:

5.4 The Rules were introduced vide Notification No.9/2005 dated

03.03.2005 which categorized services into three categories as per

Rule 3 of the said Rules, which is described as under:

i. Category I related to immovable property and stated that if the

specified services were provided in relation to immovable

property situated outside India, then the said service would be

treated to have been exported;

Page 6 of 53 ii. Category II related to performance-based services and stated

that if the specified services were either wholly or partly

performed outside India, then the same would be treated to

have been exported;

iii. Category III covered the remaining services and provided that

such services would be treated as having been exported if

provided to a customer located outside India. This sub-rule has

two other conditions- (i) that the service is delivered outside

India and used in business outside India; and (ii) that the

payment for such service is received in convertible foreign

exchange.

The controversy in these cases relate to category (iii) services,

namely, whether such services were delivered or used or consumed

outside India; and partially to category (ii) services, i.e., whether

such services were wholly or partly performed outside India.

5.5 Rule 3 of the Rules underwent several amendments from the

year 2005 till 2010, which are extracted as under:

Page 7 of 53 15.03.2005 to 15.06.2005

“Rule 3 - Export of taxable service.

… (3) in relation to taxable services, other than, -

(i) ….

(ii) …

(i) such taxable services which are provided and used in or in relation to commerce or industry and the recipient of such services is located outside India:

Provided that if such recipient has any commercial or industrial establishment or any office relating thereto, in India, such taxable services provided shall be treated as export of services only if –

(a) order for provision of such service is made by the recipient of such service from any of his commercial or industrial establishment or any office located outside India;

(b) service so ordered is delivered outside India and used in business outside India; and

(c) payment for such service provided is received by the service provider in convertible foreign exchange;” (emphasis supplied)

Page 8 of 53 19.04.2006 to 28.02.2007

Rule 3 was recast as under:

“Rule 3 - Export of taxable service.

(1) Export of taxable services shall, in relation to taxable services,—

(i) specified in sub-clauses (d), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), (zzzh) and (zzzr) of clause (105) of section 65 of the Act, be provision of such services as are provided in relation to an immovable property situated outside India;

(ii) specified in sub-clauses (a), (f), (h), (i), (j), (l),

(m), (n), (o), (s), (t), (u), (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), (zzzf) and (zzzp) of clause (105) of section 65 of the Act, be provision of such services as are performed outside

Provided that where such taxable service is partly performed outside India, it shall be treated as performed outside India;

(iii) specified in clause (105) of section 65 of the Act, but excluding,—

(a) sub-clauses (zzzo) and (zzzv);

Page 9 of 53

(b) those specified in clause (i) of this rule except when the provision of taxable services specified in sub-clauses (d), (zzzc) and (zzzr) does not relate to immovable property; and

(c) those specified in clause (i) of this rule, when provided in relation to business or commerce, be provision of such services to a recipient located outside India and when provided otherwise, be provision of such services to a recipient located outside India at the time of provision of such service:

Provided that where such recipient has commercial establishment or any office relating thereto, in India, such taxable services provided shall be treated as export of service only when order for provision of such service is made from any of his commercial establishment or office located outside India.

(2) The provision of any taxable service shall be treated as export of service when the following conditions are satisfied, namely:-

(a) such service is delivered outside India and used outside India; and

(b) payment for such service provided outside India is received by the service provider in convertible foreign exchange.

x x x (emphasis supplied)

Page 10 of 53 01.03.2007 to 26.02.2010

“Rule 3 - Export of taxable service. …

(2) The provision of any taxable service shall be treated as export of service when the following conditions are satisfied, namely:

(a) such service is provided from India and used outside India; and

(b) payment for such service is received by the service provider in convertible foreign exchange.” (emphasis supplied)

27.02.2010 upto 30.06.2012

“Rule 3 - Export of taxable service.

… (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) [omitted]

(b) payment for such service is received by the service provider in convertible foreign exchange.”

(emphasis supplied)

Page 11 of 53 III. Post 2012:

5.6 A new regime called the Negative List Regime was introduced

in service tax on 01.07.2012. The Place of Provision of Service

Rules, 2012 (for short “POP”) was also introduced.

5.7 At the outset, we shall first refer to the brief sketch of the

matters under consideration, as provided by learned counsel, as

under:

Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

C.A. No.10815- April 2006 to Rs. 36,44,18,798/- Category III • Findings in OIA dated 20.09.2013 10819/2014 March 2012 (Page 314, para 11) (refund) Telecom – inbound • roaming service provided Commissioner of Para 1, pg. 1 • Company has made roaming to Foreign Telecom Service Tax III facility available to subscribers Operators (‘FTOs’) v. of foreign telecom operators in M/S Vodafone Company is providing terms of agreement with India Limited International Inbound foreign telecom operators.

Roaming Services to FTOs. Hence, Company has In this regard, Company contractual obligation only to entered into International foreign telecom operators and GSM Roaming Agreements not to their subscribers. (Para with various FTOs to 20, pg. 322) provide International • Invoice is raised on foreign Inbound Roaming services telecom operator and payment to subscribers of FTOs in is made by foreign telecom India for which operator. (Para 20 pg. 323) consideration is paid by • Services accrue to foreign the FTOs to Company in telecom operator and they are convertible foreign the recipient of service and exchange. consideration is paid by foreign telecom operator and not by subscriber. (Para 21 pg. 324) • Relevant factor is location of service receiver and not place of performance. (Para 24 pg. 328)

Page 12 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

• Circular 111/5/2009-ST dated 24.02.2009 C.A. No. 15.03.2005 to Rs. 5,12,34,843 Category III • Western Union is providing the 5252/2015 31.03.2008 consideration for the said IO at Pg. 4 of Business Auxiliary

services and is situated outside IO at Pg. 4 of Paperbook Services - Section Commissioner of India. (Para 5.1, pg. 9-10) Paperbook 65(105)(zzb) of the Finance • Service Tax-I Follows the decision in the case v. Act, 1994 of Paul Merchants and Fine Weizman Forex Forex. (Para 5.1, pg. 11) Limited Company is an agent for Western Union in India and undertakes money transfer services for Western Union in India and charges a commission from Western Union situated abroad.

CA No. Category III Business auxiliary service is 5307/2015 Apr 2006 to Category III services where export Business Auxiliary Dec 2007 Rs. 127 Cr status is decided based on the Services: Section 65 Commissioner of location of service recipient (Page (Demand) (105)(zzb) of the Finance Service Tax 100) Act, 1994 – Delhi-IV No dispute that services of Commissioner The Respondent has a Respondents are business v. contract with an entity

auxiliary services falling under M/S Microsoft located in Singapore under Category III (Page 101) Corporation “Market Development (India) Pvt. Ltd. Mar 2005 to Rs. 244 Cr Agreement, (Page 186) Customer of Respondents for Managing Mar 2010 which are in the nature of marketing and product support (Demand) Director marketing and product services is the entity in Singapore support services with and not the person buying the respect to the products software in India from the CA No 8045 – sold by the overseas entity Singapore entity (Page 106) 8046 2018 Rs 55 Cr to Indian customers.

Commissioner of Service was delivered, used, Dec 2006 to Consideration for the Central Excise (Refund) consumed outside India as Dec 2009 service is received in India Delhi III promotion was for products by Respondents in foreign v. belonging to an entity abroad (Page currency.

Microsoft 107) Corporation India Pvt. Ltd. Service is provided to Singapore entity, to be used by them in Singapore, for the sale of their CA No 12468 – products in India and to provide 12471/2024 product support service for their Commissioner of customers in India (Page 139) Service Tax Delhi Services provided by Respondents v. to the entity in Singapore was M/S Microsoft delivered and used outside India – Corporation (Page 144) (India) Pvt Ltd (Note: All page numbers are from

Civil Appeal No5307/2015. Issues in other Civil Appeals are common.)

Page 13 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

C.A. No. 19.04.2006 – Demand of Category III Activities of Respondent company 6556/2015 31.05.2007 Rs.5,66,98,112 and fall within the scope of Export of Business Auxiliary penalty of Service Rules 2005, there is no Services: Section Commissioner of Rs.5,66,98,112 and liability of service tax - relied on Paul 65(105)(zzb) read with Service Tax-II Rs.1000 – Services Merchant Section 65(19) of the v. relating to (Impugned order at para 10, p.54 of Finance Act, 1994 – M/s Gap procurement of Paperbook) Services relating to International goods Procurement of goods Sourcing (India) Pvt. Ltd.

C.A. No. 2402- 01.07.2003 to Rs. 40,62,49,905/- Category III Findings on services rendered by 2403/2016 31.03.2008 (SCN) period from Respondent company Business Auxiliary 01.07.2003 to Services: Section (Impugned Order at para 21 – pg. Commissioner of 31.03.2008 65(105)(zzb) of the Finance 51 of Paperbook Vol I) Service Tax (Impugned Order at Act, 1994 – Distribution / Delhi pg. 15 of Paperbook marketing [Impugned V. Vol I) Order at pg. 13, Para (c) - M/S Amadeus 14 of Paperbook Vol I]. India Pvt. Ltd. Services provided by the

Respondent company fall outside OIO confirmed the the scope of BAS demand of Rs. Amadeus India Pvt. Ltd. 13,98,16,429/- for [‘AIPL’/’Respondent’] is a (Impugned Order at para 22 – pg. the period April company registered as a 52and para 24, 25 – pg. 53-54 of 2007 to March 100% Export Oriented Paperbook Vol I) 2008. Unit [‘EOU’] under the Software Technology Parks Finding of CESTAT that the (Impugned Order at Respondent was engaged in export of India [‘STP’], since the pg. 15-16 of of computer software.

year 1995. As per the Paperbook Vol I) agreement between [Impugned Order at Pg. 27 (“…in Service tax demand Amadeus Marketing, S. A. this sense the assesses on extended period [‘Amadeus, Spain’] and manufacture, produce and export of limitation set AIPL/Respondent, the software to the overseas entities.”), aside latter was entrusted with Pg. 28 & Pg. 53 of Paperbook Vol I] the distribution of (Impugned Order at Computer Reservation Activities of Respondent company pg. 57 of Paperbook; System [‘CRS’], within fall within the scope of Export of India. Amadeus Spain Service Rules, 2005, there is no OIO at pgs. 378-384 evolved and maintained liability of service tax – reliance of Paperbook Vol II) the CRS, the requisite placed on enunciation in the case No Question of law software and a data base of Paul Merchant. proposed or Ground involving a variety of raised in the Civil (Impugned Order at para 26 – pg.

information / data relating 54-56 of Paperbook Vol I) Appeal assailing the to Airlines, hotels and host findings of CESTAT of other international on invocation of travel related services. The extended period of situs of the core computer limitation. system is at Germany / Bifurcation of Spain. The CRS is demand (OIO at pg. accessed by the Travel 385 of Paperbook Vol Agents for booking II) tickets/hotels across the globe.

Page 14 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

The Respondent / AIPL supplements the functions of Amadeus, Spain, by preparing and transmitting the locally generated travel related data abroad for incorporation and synthesis into their core data base, so as to enable the Tour Operators [operating within India] to access the information / data stored in the core computer system abroad and to enable Amadeus, Spain to access information / data entered by the Tour operators. (Impugned Order at pg. 23- 30 of Paperbook Vol I). There is no dispute that the consideration for the service is received by AIPL in convertible foreign exchange, from Amadeus Marketing. The Respondent/AIPL was also deemed eligible for exemption u/s 80HHE [Deduction of profits from export of computer software] and later u/s 10A/10B [deduction of profits and gains of a 100% Export Oriented undertaking derived from export of articles/things/computer software] of the Income Tax Act, 1961. C.A. No. 571- 01.07.2003 to Rs. 32,88,68,402/- Category III Findings on services rendered by 572/2016 31.03.2008 proposed in SCN for Respondent company amounting Business Auxiliary period from to marketing and data processing Commissioner of 01.07.2003 to Services: Section 65 (105)(zzb) of the Finance (Impugned Order at para 21 – pg. Service Tax 31.03.2008 47 of Paperbook Vol I) Delhi IV Act, 1994 – marketing and (Impugned Order at v. distributing Services provided by the pg. 22 of Paperbook M/S Acquire Respondent company fall outside Vol I) (Impugned Order at pg. 20 Services Pvt. the scope of BAS Ltd. OIO confirmed the of Paperbook Vol I) (Impugned Order at para 22 – pg. demand of Rs. 48 of Paperbook Vol I) 2,56,05,193/- for the period April

Page 15 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

2007 to March 2008 Interglobe Enterprises Information Technology services established Acquire are provided by the Respondent (Impugned Order at Services in India. As per company which are excluded pg. 22 of Paperbook the agreement between component of BAS Vol I) Interglobe and Galileo (Impugned Order at para 24, 25 – Service tax demand International USA, Acquire pg. 49 of Paperbook Vol I) on extended period was marketing and of limitation set distributing the hardware aside and software to Indian travel agents to enable Activities of Respondent company (Impugned Order at them to connect to the fall within the scope of Export of pg. 52 of Paperbook; Galileo’s host CRS Service Rules, 2005, there is no OIO at pg. 440 of [Computer Reservation liability of service tax - relied on Paperbook Vol II) System] in the US. CRS is Paul Merchant Bifurcation of used for booking tickets to (Impugned Order at para 26 – pg. demand (OIO at pg. and from across the globe. 50 of Paperbook Vol I) 443 of Paperbook Vol Consideration for the service is received in India Entire Transaction explained from II) by Acquire in foreign Page 393 – Page 396. currency. C.A. No. 07/2003-09- Demand of Category III Activities of Respondent company 10885/2016 2007 Rs.2,96,35,979 and fall within the scope of Export of Business Auxiliary penalty of Service Rules 2005, there is no Services: Section 65(19)(ii) Commissioner of Rs.2,96,35,979 and liability of service tax - relied on Paul of the Finance Act, 1994 – Service Tax Rs.1000.- Money Merchant Advertise and Promote the Delhi III Transfer and Money Transfer Service v. Related Service (Impugned order at para 8, Pp.29- M/s Transcorp 30 of Paperbook) International Ltd. C.A. No. 2005-06 to Order-in-Original Category III Respondent is providing services to 3692/2017 2011-12 [Pg. confirmed the overseas entities. [Impugned Order Respondent is providing D – Synopsis – demand on three at Para 3 – Pg. 6 of the Appeal Business Auxiliary Commissioner of Appeal counts: (1) Export of Paperbook] Services to its foreign Service Tax Paperbook] Service – Rs. affiliate [Para 2 of Appeal Services provided by the Delhi IV 66,96,09,360/-; (2) at Pg. 15 of the Appeal Respondent qualifies under export vs. Salary paid to Paperbook]. of service as per Rule 3 of Export M/s Nortel Seconded employees

of Service Rules. [Impugned Order Networks India is liable to service Business Auxiliary at Para 4 – Pg. 8-9 of the Appeal Pvt. Ltd. tax – Rs. Services fall under Paperbook] 2,52,20,279/-; and Category III – Rule 3(3) up (3) Non-payment of till 15.06.2005 and Rule Tribunal placed reliance on interest on delayed 3(1)(iii) w.e.f. 18.04.2006. Microsoft Corporation India Pvt. Ltd. payment of tax – vs. CST, New Delhi [2014 (36) STR INR 94,24,777/- Respondent had entered 766 (Tri. Del.)] [CA Appeal No. into two agreements with See Order-in Original 5307/2015], GAP International its overseas entities, (1) dated 29.08.2014 at Sourcing India Pvt. Ltd. vs. CST Agreement dated Pg. 379, 391, 397 and [2014-TIOL-465-CESTAT-DEL] [CA 01.07.2000 with M/s 404 of the Appeal No. 6556/2015], Vodafone Cellular Nortel Networks Singapore Paperbook and Pg. D Ltd. vs. CCE [2014 (34) STR 890 Pte. Ltd. wherein it collects – Synopsis of the (Tri. Mum.)] [CA No. 10815/2014], information and future Appeal Paperbook. Paul Merchants Ltd. vs. CCE [2013 requirements of various (29) STR 257 (Tri. Del.)] and Alpine types of Modular Interiors Pvt. Ltd. [2014

Page 16 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

CESTAT vide telecommunication (36) STR 454 (Tri. – Del.)]. Impugned Order equipment; and (2) [Impugned Order at Para 4 – Pg. 9 dropped the entire Agreement dated of the Appeal Paperbook]. demand. Present 01.04.2003/ 01.04.2006 Entire Transaction explained from appeal is filed by the with M/s Nortel Networks PDF Pg. 572 to 575 – Counter Department only Ltd. Canada wherein Affidavit of the Appeal Paperbook with respect to the Respondent has provided and PDF Pg. 768 and 769 – Written question of Export technical support service.

Arguments of the Appeal of Service – Pg. C, G The summary of the work Paperbook. and 15 of the Appeal carried out by the Book. respondent is given in Service tax demand Appellant’s Written in dispute towards Arguments at PDF Pg. 768 export of service is -771 and Pg. 16 & 17 of the Rs. 66,96,09,360/- Appeal Paperbook. for the period 2005- 06 to 2011-12. [Pg. C – Synopsis of Appeal Paperbook] C.A. No. 01.03.2003 – Rs. 3,63,91,232/- Category III The issue is settled and thus the 1469/2017 30.11.2005 demand is unsustainable. Business Auxiliary Services: Section 65 (105)(zzb) of the [Impugned Order, Page 9-10, Paper Commissioner of Finance Act, 1994 – Sales Book-Vol-I] Central Excise, promotion and Marketing Customs, and services For the period March 2003 to Service Tax-II November 2003, there being no Bangalore IBM India Ltd., as the dispute that the services are v. business partner of M/s exported and payment has been M/s IBM India IBM World Trade received in foreign exchange, Pvt Ltd. Corporation, USA provided liability cannot be imposed for “Business Auxiliary Service” in the nature of canvassing, withdrawal of notification. selling, obtaining orders, providing market support, to identify and promote IBM [Impugned Order, Page 10-14, products in India and Paper Book-Vol-I] received a commission in freely convertible foreign exchange. [Impugned Order, Page 8, Paper Book-Vol-I] C.A. No. 2005-2010 BAS: Category - III Para 2 at pg.4 of paperbook - 9152/2017 (BAS) Rs.5,45,75,893/- Business Auxiliary Services: BAS - Covered by Paul Merchants, Commissioner of 2007-2009 Manpower Section 65 (105)(zzb) of the Microsoft Corporation, and Gap Service Tax, New and 2010-11 Recruitment/Supply Finance Act, 1994 – service International Delhi (Manpower) Agency: Rs. fee and handling v. 4,76,196 /- commission Para 4 at pg.5 of paperbook – M/s Marubeni 2008-2011 India Private Ltd. (IT) Information Marubeni India Pvt. Ltd. is a Technology Service: subsidiary of Marubeni Manpower Recruitment/Supply Corporation, Japan Agency -covered by various Rs. 1,59,828/- providing management decisions: Demand set aside. services for the transactions pertaining to importation of

Page 17 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

goods into India and export Para 6 at pg.7 of paperbook - of goods from India. (BAS)

Information Technology Service set It was also paying a licence aside - demand beyond SCN fee to Marubeni, Japan for using SAP software.

(Information Technology Software Services: Section 65(53a))

It was also receiving manpower supply services in the form of specialized employees being sent to India who were being paid by the branch overseas but controlled by the Respondent. (Manpower Recruitment or Supply Agency Services: Section 65(105)(k)) Para 9.1.1 at pg. 93,94 of paperbook Commission income - towards helping overseas group entities in marketing/procurement of goods from India and seeks new business opportunities for holding company Para 9.1.2 at pg. 95 of paperbook Service fees -towards advisory, information, provision of market information and business development services to overseas group entities C.A. No. FY 2004-05 to Service Tax demand Category III Findings on services rendered by 4009/2018 FY 2010-2011 of Rs. 5,32,96,615/- Respondent company: amounts to proposed in the SCN Business Auxiliary procurement of orders for the dated 19.03.2009 for Services: Section 65 Commissioner of foreign supplier. the period FY 2004- (105)(zzb) of the Finance Service tax, 05 to 2007-08. Act, 1994 (CESTAT Order at para 7 to 8 – pg. Mumbai 221 to 223 of Paperbook Vol I) v. Service Tax demand (Impugned Order at pg. 2 of M/s A.T.E. of Rs. 1,08,74,142/- Paperbook Vol I) Activities of Respondent company Enterprises Pvt. proposed in the SCN fall within the scope of Export of Ltd. dated 21.10.2009 for ATE Enterprises Service Rules 2005; there is no the period FY 2008- (Respondent) obtained

liability of service tax - relied on

09. orders for various types of Paul Merchant machineries from various Service Tax demand Indian Companies and (CESTAT Order at para 10 – pg.

of Rs. 1,12,67,338/- passed them on to the 227 of Paperbook Vol I) proposed in the SCN supplier located outside

Page 18 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

dated 28.09.2010 India. The foreign supplier for the period FY on receiving such orders

Activities of Respondent company 2009-10. delivers the goods to the fall within the scope of Export of Indian Companies. The Service Tax demand Service Rules 2005; there is no Respondent received of Rs. 1,33,88,372/- liability of service tax commission in Convertible proposed in the SCN Foreign Exchange from the (Impugned Order at para 6, 7 – pg.

dated 18.10.2011 foreign supplier on such 8 to 14 of Paperbook Vol I) for the period FY deliveries of ordered goods.

2010-11. Entire Transaction explained from The Respondent does not engage himself in Page 216 – Page 224 In total Service Tax demand of Rs. assembling and organizing 8,88,26,467/- of the imports. The proposed in the Respondent is supposed to SCNs for the period procure the orders and FY 2004-05 to 2010- pass it on to the foreign

11. supplier. The entire transaction is of (OIO at pg. 110 - 111 procurement of orders and of Paperbook Vol I) rendering of services OIO confirmed the towards the foreign demand of Rs. supplier.

8,81,19,194/- for the period FY 2004- 05 to 2010-11 along with interest and penalty. (OIO at pg. 206-209 of Paperbook Vol I) Service tax demand set aside by CESTAT vide order dated 07.01.2015 (CESTAT Order at pg. 233 of Paperbook Vol I) Revenue department filed appeal before the Bombay High court. Appeal dismissed vide order dated 31.07.2017 Impugned Order at pg. 1-17 of Paperbook Vol I) Bifurcation of demand (OIO at pg. 193-194 of Paperbook Vol II)

Page 19 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

SLP(C) No. 01.01.2011 to Cenvat credit Category III - a) Telecommunication services 25413-25414 & 30.09.2014 refunds for period provided by the respondent to its Rule 3(1)(iii) of Export of 25416/2018 from 01.01.2011 to overseas customer qualify as services Rules 2005 and 30.09.2014 were exports both during the period Assistant Rule 6A(1) of the Service rejected alleging January 2011 to June 2012 and Commissioner of Tax Rules, 1994. services do not during the period July 2012 to Service Tax qualify as exports Telecommunication September 2014 under Rule 3(1) Delhi III under Rule 3 (1) (iii) Services: Section 65(109a) (iii) of the Export of Services Rules, v. of Export of Services r/w 65(105)(zzzx) of the 2005 and Rule 6A (1) of the Service Verizon Rules, 2005 (pre Finance Act, 1994 – upto Tax Rules 1994 read with Rule 3 Communication negative list) and 30.6.2012 of the POP Rules 2012 India Pvt. Ltd. Rule 6A(1) of the respectively. Services Tax Rules, Telecommunication Services: Rule 2(q) read b) The provision of service by the 1994 (post negative with Rule 3 of the Place of respondent to its overseas list) as these Provision of Services customer complied with the services are Rules, 2012 and the conditions to be considered as provided within Finance Act, 1994 – from export of service. Payment for the India. 1.7 2012 service was received by the (Para 7 of Impugned respondent in convertible foreign Order at pg. 8-9of Relevant period in the exchange and recipient of the Paperbook Part I) matters is post 27.2.2010 service was Verizon US which was Following 2 periods are located outside India. involved in these SLPs: c) The subscribers to the services ➢ January 2011 to June of Verizon US may be “users” but 2012 (pre-negative list) under the master supply agreement, it was Verizon US who ➢ July 2012 to September was the “recipient” of such services 2014 (post negative list) and it is Verizon US who paid for the services. ➢ a) Period involved in this

SLP is after 27/02/2010. d) Denial of refund of Cenvat credit During the entire relevant to the respondent was not period of 01/04/2012 to sustainable in law and the orders 30/09/2014 the denying the refund of Cenvat requirement of “delivered credit were set aside. outside India”, or “provided outside India” or “used (Impugned Order at para 54 (i) to outside India” was not there (vi) and para 55 – pg. 59-63 of and these had already been Paperbook Part I) omitted long prior to the relevant period.

b) In rule 3 (2) of the Export of Service Rules, 2005 (ESR) the expressions during earlier periods were “delivered outside India”, “used outside India”, “provided outside India” at different places from time to time. All these expressions were omitted from time to time before the relevant period.

Page 20 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

c) After the amendments made from 27/02/2010, the only twin requirements of rule 3 of ESR were the following:

i) Rule 3 (1) (iii) – that the recipient of service is “located outside India”;

and

ii)Rule 3 (2) (b) – “payment for such service is received by the service provider in convertible foreign exchange”.

d) On 01/07/2012, the old provisions of ESR were superseded and following provisions came into force:

i) Rule 6A providing for “Export of Services” was inserted in Service Tax Rules, 1994 (STR).

ii) Place of Provision of Service Rules, 2012 (POP) came into force.

e) Rule 6A continued with the requirement of recipient of service being located outside India and payment being received in convertible foreign exchange. Rule 3 of POP specifically provided that the place of provision of a service shall be the location of the service recipient.

(Impugned Order at para 26 to 30 - pg. 33-38 of Paperbook Part I) Nature of Services: Verizon Communications India Pvt Ltd (VCIPL) entered into an agreement with MCI International Inc. (‘Verizon US’), to render connectivity services to Verizon US.

Verizon US is a Company located outside India and is inter alia engaged in

Page 21 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

provision of telecommunication services to its customers across the globe. Verizon US does not have the capacity to provide such services in all geographical locations, hence, it takes services from other entities including VCIPL to provide data connectivity from/to India to its customers. The connectivity services were provided by VCIPL to Verizon US on its own account and on principal-

to-principal basis. For these services, VCIPL raised invoices on Verizon US and received payment from Verizon US in convertible foreign exchange. The services were claimed as exports under Rule 3(1) (iii) of the Export of Services Rules, 2005 and Rule 6A(1) of the Service Tax Rules 2005 read with Rule 3 of the POPS Rules 2012 for the pre-negative list and post negative list regimes respectively.

C.A. No. 9139- 01.04.2007 to Service tax demand Category III Post 27.02.2010, for an Export of 9140/2018 31.03.2012 of Rs. 5,57,68,593/- Service to be made out, only two Business Auxiliary Services proposed in SCN for conditions were to be satisfied i.e. Commissioner of (marketing and period from provision of service must be to a Central Excise distributing): Section 65 01.04.2007 to (105)(zzb) of the Finance recipient located outside India by a Noida 31.03.2012 Act, 1994 person inside India and that v.

payment of such service is to be M/s Samsung Category II India Electronics (SCN dated received by the service provider in Pvt. Ltd. 18.09.2012 at pg. Management, maintenance convertible foreign currency. It was 172-173 of or repair services : Section contended that for the relevant (C.A. No. Paperbook Vol II) 65(105)(zzg) of the Finance period, M/s Samsung India 9139/2108 Act, 1994 Electronics Pvt. Ltd. was satisfying pertaining to SCN OIO dated these conditions. However, on the dated 09.01.2008 28.03.2014 M/s Samsung India issue as above, no findings were and OIO dated confirmed the Electronics Pvt. Ltd. was returned by the Ld. CESTAT. 24.11.2008 were demand of Rs. engaged in the activity of dismissed by this 5,57,68,593/- for identifying new prospective Facts of the instant case were Hon’ble Court the period customers and effectively found to be similar to the case of vide Order dated 01.04.2007 to communicating to them the Blue Star Ltd. (rendered by the Ld. 19.08.2021 due 31.03.2012 features of their foreign CESTAT) which pertained to export to low tax effect) clients’ CDMA products. of the services of maintenance of

Page 22 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

(OIO dated M/s Samsung India equipment on behalf of foreign 28.03.2014 at pg. Electronics Pvt. Ltd. also clients to Indian buyers. 280 of Paperbook Vol provided customer care (Impugned Order at para 6, pg. 6 of II) services to the customers Paperbook Vol I) of CDMA mobile phones in India on behalf of Paul Merchant was referred to in Samsung Electronics the decision of Blue Star Ltd. Company Ltd., Korea.

(Impugned Order at para 9 of For these two activities, Paperbook Vol I) M/s Samsung India Electronics Pvt. Ltd. was The facts of the instant case are receiving a commission similar to the case of Blue Star Ltd.. It was therefore held that M/s from their foreign client in

Samsung India Electronics Pvt. Ltd. foreign exchange.

had provided services of Business (Impugned Order at pg. 3 of Support and maintenance and repair Paperbook Vol I) to their client located outside India and performed in India on behalf of the client located outside India. (Impugned Order at para 8, pg. 28 of Paperbook Vol I) The extended Period of Limitation vide OIO dated 28.03.2014 was contested on the ground that Revenue had in knowledge all facts pertaining the services provided by M/s Samsung India Electronics Pvt. Ltd. inasmuch as for the previous period of dispute of July, 2003 to November, 2003 and March, 2005 to May, 2006, Revenue had issued an SCN dated 09.01.2008 qua the very same services under consideration.

Thus, in terms of Nizam Sugar Factory vs. Collector of Central Excise 2008 (9) STR (S.C.) extended period of limitation could not be invoked. However, as the Ld. CESTAT had decided the issue of export of services on merits, it did not consider the issue on limitation as above.

(Impugned Order at para 9, pg. 30 of Paperbook Vol I) M/s Samsung India Electronics Pvt. Ltd. is not required to pay service tax at all. Question of penalty does not arise.

(Impugned Order at para 10, pg. 30 of Paperbook Vol I)

Page 23 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

C.A. No. April 2008 to Rs.11,33,4S,443/- Category III Pg. 19 of Paperbook 10349/2018 November (Only BAS demand Business Auxiliary Principal to principal and not as 2009 is mentioned @ Page Services (marketing and agent Commissioner of Pg. 69 of B of Synopsis) promotion): Section 65 Central Excise & Para 7 at pg. 21-22 of Paperbook paperbook (105)(zzb) of the Finance Service Tax Act, 1994 No consideration for service v.

Canon India Sole distributorship of Reference to Clauses of agreement Canon Singapore’s products. Heavy Previous period finding – activity expenditure undertaken by not BAS Canon India for promotion Para 8 at Pg. 22 of paperbook - in India, which is Covered by Gap subsidized by Canon Singapore by way of reimbursement. This reimbursement is alleged to be paid towards provision of BAS services, which do not amount to export.

C.A. No. Show Cause Rs. 7,47,96,885/- Category III Issues framed 9745/2018 Notice dated for BAS Business Auxiliary (Impugned Order at para 4 – pg. 4 19.10.2011 (Annexure A1 at pg. Services (marketing and of Paperbook) Commissioner of (2006-07 to 86, 95 of Paperbook) distributing): Section 65 Service Tax Respondent company is exclusive 2009-10) (105)(zzb) of the Finance v. agent of Olympus Singapore PTE Act, 1994 M/S J Mitra and (Annexure A1 Ltd. in India for promotion of sales Company Pvt. Rs. 58,500/- for at pg. 58, 86 (Impugned Order at pg. 2 of and services of Olympus Ltd. ‘supply of tangible of Paperbook) Paperbook) goods service’ (Impugned Order at para 5 – pg. 4 J. Mitra appointed by of Paperbook) (Annexure A1 at pg. foreign entity for Show Cause 96 of Paperbook) For export of service, CESTAT promotion and sales of the Notice dated relied on Paul Merchant and Gap Rs. 6,52,794/- for latter’s endoscopy 16.04.2012 International commissioner equipment in India. (2010-11) received from (Impugned Order at para 5.1 – pg. 5 foreign currency of Paperbook) (Annexure A2 at pg. 103, (Annexure A2 at pg. On whether hiring of endoscope 106 of 106 of Paperbook) would amount to ‘supply of Paperbook) tangible goods for use service’ or not – matter was remanded to

original authority to determine whether there is a ‘service’ or ‘sale’?

(Impugned Order at para 6.4 – pg.

21 of Paperbook) Note: remand is not challenged in SLP.

Page 24 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

C.A. No. Show Cause Rs. 6,20,48,263/- Category III Relied on Paul Merchant 10071/2018 Notice dated on export of service Business Auxiliary (Impugned Order at para 4 – pg. 3 19.10.2011 / BAS Services: Section 65 of Paperbook Vol I) Commissioner of (2006-07 to (Show Cause Notice (105)(zzb) of the Finance Service Tax 2009-10) at Annexure A2 – pg. Act, 1994 Delhi 116, 163 of v. (Annexure A2 Management or Business Paperbook Vol I) SGC Services at pg. 115 of Consultants Services and Pvt. Ltd. Paperbook Vol Rs. 24,12,00,011/- BAS I) on reimbursement (Show Cause Notice at pg. of expenses Show Cause 115 of Paperbook Vol I) Notice dated (Show Cause Notice 1. Contract with foreign 18.04.2012 at Annexure A2 – pg. hotels for providing rented 164, 182 of (01.04.2010 space, infrastructure and Paperbook Vol I) to staff, for their development 30.09.2011) Rs. 27,58,18,333/- on centres. export of service /BAS2. (Annexure A3 and reimbursement of3. Payroll processing for at pg. 198 of expenses foreign company for the Paperbook Vol (Show Cause Notice at latter’s clients based in I) Annexure A3 – pg. 208 India & the Middle East Show Cause of Paperbook Vol I) Notice dated Rs.1,58,19,80,761/- 31.03.2013 on export of services & Rs.18,27,12,058/- on (01.10.2011 reimbursement of to expenses 30.09.2012) (Show Cause Notice (Annexure A4 at Annexure A4 – at pg. 215 of para 7, pg. 223 of Paperbook Vol Paperbook Vol I) I) C.A. No. 11837- SCN dated Rs. 8,13,15,324/- Category III CESTAT Delhi order dated 11838/2018 26.09.2007 13.10.2015 - (Rs. 6,97,58,354/- BAS - Marketing and (i) BAS - under Business distributing Para 3 at pg. 4 of paperbook - Commissioner of 01.07.2003 to Auxiliary Service) Central Excise Agilent provided sales Department did not contest the 19.11. 2003 (ADJ) promotion, admin support position that services constitute and v. (Rs. 1,15,56,970/- and market study reports Export of Services 19.04.2006 to Agilent for Management, to Agilent Singapore. 31.03.2007 Followed the decisions in the case Technologies Maintenance or (ii) Management, Category II Management, of Paul Merchant and Microsoft India Private repair service) Maintenance Maintenance or repair Corporation Limited or repair service service – CESTAT Delhi order dated 01.07.2003 to Agilent also undertakes 31.07.2017 - 19.11.2003 tech support, installation Para 3 at pg. 9 of paperbook and facilities for Agilent 01.03.2005 to Singapore’s customers in Followed the above Order dated 31.03.2007 India. 13.10.2015 for the previous period in the case of Agilent

Page 25 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

SCN dated 17.10.2008, 14.10.2009, 19.10.2010, 24.10.2011 - April 2007- March 2011 C.A. No. 2005-06 to Rs. 6,80,39,260/- Category III The assessee has provided 1440/2019 2008-09 marketing and support services Business Auxiliary Commissioner which admittedly is covered under Services: Section 65 Central Excise the Business Auxiliary Services (105)(zzb) of the Finance Delhi-II category, for which provision of Act, 1994 – Sales v. service is determined as per the promotion and Marketing M/s Research in location of the recipient. In the services Motion India present case, beneficiary is RIM Pvt. Ltd. [Period- October 2005- Singapore, who paid the March 2006 and June consideration for service. It is 2009-February 2010] settled that in such situations, the

services are considered exported.

Research in Motion India Pvt. Ltd. entered into a [Impugned Order, Page 10-11, service agreement with Paper Book-Vol-I] Research in Motion,

Issue also has been decided in the Singapore, for providing assessee’s own case and the order sales promotion and has attained finality.

marketing service.

[Impugned Order, Page 12-13, [Impugned Order, Page 5, Paper Book-Vol-I] Paper Book-Vol-I] The decisions relied upon are applicable and thus the credit cannot be denied. [Impugned Order, Page 11, Paper Book-Vol-I] Interest cannot be levied when provision was brought in S. 67 from 10.05.2008. [Impugned Order, Page 12, Paper Book-Vol-I]

SLP(C) No. April 2008 to Rs. 3,45,75,127 Category III Receiving commission from foreign 10281/2019 March 2009 based principal for promotion and Business Auxiliary sale of products in India. Services: Section 65 Principal (105)(zzb) of the Finance Commissioner of Act, 1994 – Sales Service Tax promotion and Marketing v. services M/S Wartsila India Limited

Page 26 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

C.A. No. April 2007 to Rs. 13,67,38,768 Category III Company is providing telecom 4959/2019 September services to customer of foreign Telecom – inbound 2010 telecom service provider while he is roaming service provided CST in India using Company’s network, to foreign telecom v. there is no contract or agreement operators Vodafone Mobile between the Company and the Service Limited subscriber. (Para 9, Page 12)

The agreement is with FTO located outside India and subscriber of the said FTO (who is the customer / service recipient of the Company). Customer is not customer of Company.

C.A. No. 2006-2011 Rs. 27,54,39,641/- Category-III Consideration received in 7483/2019 convertible foreign exchange and Business Auxiliary Service Section 65(105)(zzb) and in lieu of services provided. The Commissioner of Information Technology activities undertaken would qualify Service Tax, Delhi Software Service - Section as export of service (Page 9) v. 65(105)(zzzx) With respect to the remainder M/S Autodesk Autodesk India Pvt. Ltd. is a demand of Rs. 31,80,857/-, an India Private Limited wholly owned subsidiary of amount of Rs. 24,17,526/- stands Autodesk Inc. paid. (Page 10) USA. Autodesk is engaged in providing marketing and Remainder demand of Rs. technical support services to 7,63,331/- set aside as the M/s Autodesk Asia Pte. Ltd., classification of the service is Singapore (‘AAPL’) which in misplaced. (Page 12-13) turn in engaged in the business of developing, manufacturing, distributing and supporting certain computer software and related products in India.

C.A. No.9008- 01.12.2005 to Rs. 24,96,37,632 Category III IBM India provides services to 9009/2019 their foreign company situated 01.09.2007 Business Auxiliary Services: Section 65 outside India and their parent Commissioner of (105)(zzb) of the Finance company does not have any Central Excise, Act, 1994 – Sales commercial or industrial and Service Tax, promotion and Marketing establishment or any office in Bangalore LTU services India and the services by IBM v.

M/s IBM India The assessee entered into India are provided in relation to Pvt Ltd. an agreement with M/s. provision of service recipient i.e. IBM World Trade IBM WTC. Further, the IBM India Corporation, USA terms of has satisfied the conditions that which the assessee was are required under the Export of appointed as IBM USA’s

Page 27 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

Business Partner in India Service Rules, 2005.

for the purpose of marketing selected IBM [Impugned Order, Page 11] products. The assessee

There is no condition under Export received payment of commission in convertible of Service Rules, 2005 that the foreign exchange. The services performed in India would assessee undertook not qualify as export of services.

various activities viz. promotion, marketing, [Impugned Order, Page 11] sales, procurement of orders, and provide marketing support to identify and promote the products of IBM USA in India. [Impugned Order, Page 3]

Diary No. 2005-2006 to 1.Rs. 8,64,15,782/- Category III Relied on the decision of Paul 38417/2019 2009-2010 Commission Merchants (Del Tri) [Page 10] and Business Auxiliary Microsoft (Del Tri.) [Page 11] Commissioner of 2.Rs.2,90,09,918/- Services: Section 65 Service Tax - Service Fee (105)(zzb) of the Finance Recipients of service are foreign Delhi Act, 1994 entities and they are the v. 3.Rs.1,40,76,983/- - consumers of the services being M/S Sumitomo Demand for Sumitomo Corporation provided from India [Page 10] Corporation Reversal of credit India is involved in trading India Private Total demand of ST: of goods in India. Apart The customers to whom the goods Limited Rs. 11,54,25,700 from that, Sumitomo India were sold or people from whom also extends services to information was collected were not Penalty under parent companies in the recipients of service provided Section 78: Rs. relation to import of goods by Sumitomo. [Page 10] 11,54,25,700 into India. The services provided are in the nature The customers to whom the goods Penalty under Rule of transmitting proposals, were sold by foreign entity or 15(3): Rs. delivering contract sheets,

people from whom information was 25,53,340/- checking vessel and collected were not the recipients of Penalty under schedules, loading service provided by Indian entity.

Section 77:Rs.5000 unloading services etc. [Page 10] For these services, Sumitomo India obtains a commission from the Person who requested for the said foreign entities in foreign service and liable to make payment exchange in India. for the same, has to be treated as recipient of service and not the Similarly, Sumitomo also

person affected by the performance undertakes promotion & of service. [Para 11] marketing of products / business for foreign companies in India and charges a ‘service fee’ for these services.

Page 28 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

CA No. 2009-10 till Service tax demand Category III The CESTAT in the impugned 2634/2020 2012-13 of Rs. order held that the operating Business Auxiliary 28,92,48,439/- expenses that were incurred for Commissioner of proposed in SCN Services: Section 65 the purpose of developing and Service Tax VII dated 13.10.2014 (105)(zzb) of the Finance expanding the market of the Mumbai (Now for period from Act, 1994 – marketing and products in India were sought to known as 2009-10 till 2012-13 distributing be reimbursed by the ALOG to the Commissioner of Assessee and such reimbursable (Impugned Order at (Impugned Order at pg. 42 Central Goods expenses incurred cannot be pg. 7 of Appeal) of the appeal) and Service Tax, included in the taxable value of Excise and OIO dropped the services rendered. The Assessee was trading Customs, Navi proceedings vide in nutritional products in (Impugned Order at pg. 37 of the Mumbai) order dated India as a distributor of appeal) v. 04.03.2015 initiated imported goods from its M/s Abbott against the Services provided by the fellow subsidiary company Healthcare Pvt. Respondent vide Respondent company fall within Abbott Logistics B.V. Limited SCN dated the scope of BAS as also admitted Netherland (hereinafter 13.10.2014. referred to as “ALOG”) on by the Revenue (Impugned Order at principal-to-principal (Impugned Order at para 5.7 – pg. pg. 2 of Appeal) basis. The products are 42 of Appeal) imported by the Assessee. In order to increase its Activities of Respondent company market share and grow in fall within the scope of Export of Bifurcation of the market, the Assessee Service Rules 2005, there is no demand (Impugned entered into an liability of service tax Order at pg. 3 of Appeal) arrangement with ALOG (Impugned Order at para 5.7 & 5.8 whereby it was mutually – pg. 43 & 44 of Appeal) agreed that extraordinary or operating expenses incurred by the Assessee in respect of advertising of imported goods under distribution modelling hiring skilled personnel etc. in each financial year would be reimbursed to enable the Assessee to continue to earn an arm’s length margin in its existing trading business. C.A. Nos.3546- 01.04.2012 to CENVAT credit Category III - Rule 3(1) (iii) The CESTAT Delhi held that 3549/2020 30.09.2014 refunds for period of Export of Services from 01.04.2012 to “it is evident that the services of the Rules, 2005 and Rule 30.09.2014 were Appellant (Verizon India) to Verizon Commissioner of 6A(1) of the Service Tax rejected alleging US do not merit classification under Service Tax Rules, 1994 services do not the category of intermediary Delhi -III qualify as exports Following 2 periods are services v. under Rule 3 (1) (iii) involved in this matter: M/s. Verizon Accordingly, we hold that the of Export of Services India Pvt. Ltd. ➢ April 2012 to June 2012 appellants have rendered Rules, 2005 (upto 30.6.2012) and Rule (pre-negative list) services to Verizon US as principal 6A of the Services Tax service provider and not as Rules, 1994 (from ➢ July 2012 to September intermediary” 1.07.2012) 2014 (post negative list)

Page 29 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

(Impugned Order at Business Support Service Accordingly, we hold that the pg. 1 to 70 of 65(104c) r/w 65(105)(zzzq) appellants (Verizon India) are entitled Paperbook Part I) of the Finance Act, 1994– to refund under rule 5 of the Cenvat upto 30.6.2012 Credit Rules, 2004 read with the Assistance concerned notification.” Commissioner Support Services: Section sanctioned service 65B (49) of the Finance (Impugned Order at para 31 – pg. tax refund Act, 1994 – From 69-70 of Paperbook Part I) 01.07.2012 The adjudicating authority (OIO at pg. 106 to 133 of Paperbook Nature of Services: Verizon analysed 6 issues conditions for Part I) India Pvt Ltd is rendering determination as to whether the Business Services to services were “export of service” Verizon US. The services and decided the same in favour of provided by VIPL to the respondent. The service Verizon US were classified recipient (Verizon US) was located as ‘Business Support in USA, that is, outside India. The Services’ (‘BSS’) in the place of provision of service was service tax returns and outside India. Payment was claimed as exports in received by the respondent in terms of under Rule 3(1) convertible foreign exchange. (iii) of the Export of Under rule 3 of the POPS Rules, Services Rules, 2005 and the Place of provision of service Rule 6A (1) of the Service was the location of service Tax Rules 1994 read with recipient which was outside India. Rule 3 of the POPS Rules (Impugned Order at para 7 – pg. 31- 2012 under pre-negative 43 of Paperbook Part I) list and post negative list regimes respectively. Further, admitted facts as Consideration for the recorded by the CESTAT are that services is received by the respondent provided services VIPL in convertible foreign and raised invoices on principal to exchange. principal basis on Verizon US. Its contract was with Verizon US

which was located outside India.

The respondent received remittance in convertible foreign exchange. The respondent satisfied all the conditions for the services being treated as export of service. (Impugned Order at para 30 – pg.

67 of Paperbook Part I) Diary No. - Rs. 13,19,52,397 – Category II Services have been performed from 24028-2020 Export of technical India. Principal or the service Clinical and pharmaceutical C.C.E. and S.T testing service receiver is located outside India.

research on new drugs Bangalore LTU through testing and analysis Thus, the technical testing and v. of their effect on human analysis services have been M/S Fanuc beings / volunteers with delivered by the appellant outside India Pvt. Ltd. resultant data being India and have been used by the evaluated by experts service receiver outside India. situated abroad who analyze (findings of Hon’ble Tribunal in 5.2) the data and arrive at the conclusions/outcome of the test results.

Page 30 of 53 Appeal no. Period of Demand Category and Nature of Findings on Facts of the case in Dispute Service Impugned Order

C.A.No. 05/2006 – Rs. 13,58,18,217 – Category II and III “The ‘technical testing and analysis 2424/2022 09/2009; Technical Testing service’… have been delivered by the Clinical and 07/2007- and Analysis; appellant outside India and have pharmaceutical research Commissioner of 03/2009 Catering Service; been used by the service receiver on new drugs through Central Tax Renting Service outside India.” testing and analysis of Bangalore North

their effect on human (Impugned order at para 5.2, P.8 of v.

beings / volunteers Paperbook) Lotus Lab Pvt. Ltd. “So far as denial of CENVAT credit

on catering services is concerned, the issue stands settled in favour of the [assessee]” (Impugned order at para 5.3, P.8 of Paperbook) “We hold that rent paid even for the period, the premises were under repair/renovation to make them suitable for the use of the appellant/assessee, is also deemed to be used for business purposes.” (Impugned order at para 5.4, PP.8-9 of Paperbook) SLP(C) No. - - Category III Receiving commission from foreign 26382/2023 based principal for promotion and Business Auxiliary Services: Section 65 sale of products in India.

Commissioner of (105)(zzb) of the Finance CGST & Central Act, 1994 – Sales Excise Belapur promotion and Marketing v. services Wartsila India Limited

Submissions:

6. During the course of submissions, learned Additional Solicitor

General (ASG) Sri Vikramjit Banerjee appearing for the appellant

Revenue as well as learned senior counsel and counsel for the

respondents-assessees drew our attention to the fact that in this

batch of appeals, the services are all in either Category (ii) or

Page 31 of 53 Category (iii) services, vide Rule 3 of Rules. It is also not in dispute

that the clients/customers of the assessees with whom the contract

of service has been entered into and from whom payment in

convertible foreign currency is received by the respondent assessees

herein are all located outside India. Further, CESTAT has rendered

findings of fact that the services have indeed been delivered outside

India to the customers located outside India and hence, no

substantive questions of law arise in these appeals. Of course, this

submission is assailed by the appellant Revenue in these appeals.

6.1 Further, in respect of category No.(ii) services, CESTAT has

observed that even the performance test has been satisfied.

According to the respondent assessees, the actual services that

have been rendered by them in these appeals are (i) Business

auxiliary services (category-III); (ii) Telecommunication services

(category-III); and (iii) Management, maintenance and repair

services (category-II) under Rule 3 of the Rules. The relevant

provisions of the Finance Act, 1994 pertaining to the aforesaid

taxable services are extracted as under:

Page 32 of 53 (i) “Business Auxiliary Services

“Section 65 - Definitions. - In this Chapter, unless the context otherwise requires-

… (19) "business auxiliary service" means any service in relation to, -

(i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or

(ii) promotion or marketing of service provided by the client; or

(iii) any customer care service provided on behalf of the client; or

(iv) procurement of goods or services, which are inputs for the client; or Explanation.- For the removal of doubts, it is hereby declared that for the purposes of this sub-

clause, "inputs" means all goods or services intended for use by the client;

(v) production or processing of goods for, or on behalf of, the client;

(vi) provision of service on behalf of the client; or

(vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any activity that amounts to manufacture of excisable goods.”

Page 33 of 53 …

“(105) "taxable service" means any service provided or to be provided –

(zzb) to a client, by any person in relation to business auxiliary service;”

(ii) Telecommunication Service

“Section 65 - Definitions. - In this Chapter, unless the context otherwise requires-

(109a) "telecommunication service" means service of any description provided by means of any transmission, emission or reception of signs, signals, writing, images and sounds or intelligence or information of any nature, by wire, radio, optical, visual or other electro- magnetic means or systems, including the related transfer or assignment of the right to use capacity for such transmission, emission or reception by a person who has been granted a licence under the first proviso to sub-section (1) of section 4 of the Indian Telegraph Act, 1885 (13 of 1885) and includes—

(i) voice mail, data services, audio tax services, video tax services, radio paging;

(ii) fixed telephone services including provision of access to arid use of the public switched telephone network for the transmission and switching of voice, data and video, inbound and outbound telephone service to arid from national and international destinations;

Page 34 of 53 (iii) cellular mobile telephone services including provision of access to and use of switched or non-switched networks for the transmission of voice, data arid video, inbound arid outbound roaming service to and from national and international destinations;

(iv) carrier services including provision of wired or wireless facilities to originate, terminate or transit calls, charging for interconnection, settlement or termination of domestic or international calls, charging for jointly used facilities including pole attachments, charging for the exclusive use of circuits, a leased circuit or a dedicated link including a speech circuit, data circuit or a telegraph circuit;

(v) provision of call management services for a fee including call waiting, call forwarding, caller identification, three-way calling, call display, call return, call screen, call blocking, automatic call-back, call answer, voice mail, voice menus and video conferencing;

(vi) private network services including provision of wired or wireless telecommunication link between specified points for the exclusive use of the client;

(vii) data transmission services including provision of access to wired or wireless facilities and services specifically designed for efficient transmission of data; and

(viii)communication through facsimile, pager, telegraph and telex, but does not include service provided by—

Page 35 of 53

(a) any person in relation to on-line information and database access or retrieval or both referred to in sub-clause (zh) of clause (105);

(b) a broadcasting agency or organisation in relation to broadcasting referred to in sub-clause (zk) of clause (105); and

(c) any person in relation to internet telecommunication service referred to in sub-clause (zzzu) of clause (105);” …

“(105) "taxable service" means any service provided or to be provided –

(zzzx) to any person, by the telegraph authority in relation to telecommunication service”

(iii) Management, maintenance and repair service

“Section 65 - Definitions. - In this Chapter, unless the context otherwise requires-

…

(64) "management, maintenance or repair" means any service provided by-

(i) any person under a contract or an agreement;

or

(ii) a manufacturer or any person authorised by him, in relation to,

(a) management of properties, whether immovable or not;

Page 36 of 53 (b) maintenance or repair of properties, whether immovable or not;

(c) maintenance or repair including reconditioning or restoration, or servicing of any goods, excluding a motor vehicle;

Explanation.- For the removal of doubts, it is hereby declared that for the purposes of this clause,-

(a) "goods" includes computer software;

(b) "properties" includes information technology software;” …

“(105) "taxable service" means any service provided or to be provided -

… (zzg) to any person, by any person in relation to management, maintenance or repair;”

7. One of the points of controversy raised in these appeals by

learned ASG Sri Vikramjit Banerjee appearing for the appellant

herein revolves around the interpretation of the expressions

“delivered outside India and used outside India” and “provided

from India and used outside India” in Rule 3 of the Rules.

According to the learned ASG, even if the contractual customer is

located outside India, if the beneficiaries of the services are located

Page 37 of 53 within India, then they do not fall within the scope of the

exemption.

7.1 In light of the aforesaid controversy, the learned ASG placed

reliance on Paul Merchant vs. CCE, 2013 (29) STR 252 (Tri.-Del.)

(“Paul Merchant”), paragraph 16 of the said order, which reads as

under:

“16. The entire argument of Revenue is based on the fact that the activities of PML are performed in India though words like “used in India” are used while arguing the point. We say so because there is no doubt that the use of the service is by the person paying for it that is Western Union and through them the person abroad who wants to remit the money and hence the use is outside India. But Revenue wants that the issue of export should be decided with reference to place of performance of service by PML, ignoring the fact that Business Auxiliary Service is not specified in Rule 3(1)(ii) where performance of service is the criterion but specified in Rule 3(1)(iii) wherein criteria are different. If performance is the criterion to be adopted for deciding what constitutes export for Business Auxiliary Service what is required is to specify the service defined in Section 65(105)(zzb) in Rule 3(1)(ii) of the Export of Services Rules, 2005. It is a different matter that even under Rule 3(1)(ii), the criteria laid down indicate that if the service is performed partly outside India, it will be considered that the service is performed outside India and specifying the service under Rule 3(1)(ii) itself may not result in the outcome as desired by the ld. SDR. At any rate, after specifying it in Rule 3(1)(iii), it is fallacious to argue that the criterion applicable for services in Rule 3(1)(ii) should be applied for this service.”

Page 38 of 53

8. In response to this submission, learned Senior counsel and

learned counsel for the respondents submitted that service tax is a

contract-based levy and therefore, it is the contract which

determines the relationship between a service provider and a service

recipient. Even if certain beneficiaries may be located in India, the

service provider has no contractual relationship with such

beneficiaries. There is no privity of contract between the beneficiary

and the service provider. Therefore, the mere fact that the

beneficiary of the service is located in India would not be a

determinant factor for the levy of service tax under the Rules as the

service is, in fact, provided to a recipient located outside India.

8.1 It was further contended on behalf of the respondent

assessees that various preparatory activities, such as sourcing

vendors, identifying customers etc. may occur in India but such

activities alone would not mean that the service has not been

exported to a party located overseas. Even if the customer has

requested for some service within India, what is of significance is to

whom the service is provided and where the recipient of the service

is located and secondly, from whom the payment in convertible

Page 39 of 53 foreign exchange is received and whether, the recipient is located

outside India.

8.2 Learned senior counsel and learned counsel for the

respondents contended that the reasoning in Paul Merchant is

correct and CESTAT has rightly found that the Revenue has

conflated the two categories and is subjecting category (III) services

to the rigors of the performance-based services under category (II) of

the Rules. It was therefore their contention that the present appeals

may simply be dismissed.

9. Another issue which was highlighted was with regard to the

judgment of this Court in C.A. No. 10349 of 2018 (Commissioner

of Central Excise and Service Tax vs. Canon India private

Limited). It was submitted that where the assessee in these cases

is a principal-to-principal distributor of the foreign company, i.e.,

where the assessee purchases goods from the foreign company and

further sells them on its own account to independent customers in

India, the finding of the CESTAT that the assessee is carrying out

the sales and promotion on their own behalf is correct. In such a

case, the assessee's activities are not covered under the definition of

Page 40 of 53 business auxiliary service within sub-section (19) of Section 65 of

the Finance Act, 1994. Hence, it is not liable to pay any service tax

on the receipts from the foreign company as a reimbursement of

marketing expenses. The CESTAT has also rightly found that no

service tax would be payable under the Rules and therefore had

rightly set aside the demand.

10. In sum and substance, it was contended by learned senior

counsel and learned counsel for the assessees that there is no merit

in these appeals and the same may be dismissed.

11. Sri S.K. Bagaria, learned senior counsel appearing on behalf

of the respondent-assessee in C.A. Nos.3546-3549 of 2020 (Verizon

Communication India Pvt. Ltd.) submitted that the issue in these

cases relates to export of telecommunication services and the

respondent assessee is in the business of providing data

connectivity service. The assessee entered into a contract with its

overseas customer (Verizon, USA) to provide the said service. That

Verizon, USA provides telecommunication service to its own

customers across the world and to enable data transfer from/to

India, Verizon, US availed connectivity services from the respondent

Page 41 of 53 assessee (Verizon Communications India Private Limited) for

enabling data transfer from India to overseas. That the nature of the

transaction has been encapsulated as under:

“i. The respondent’s contract was with Verizon US who alone had the contractual right and liability to receive the service and pay for the same.

ii. The respondent raised its bills on Verizon US.

iii. Verizon US paid the bills in convertible foreign exchange directly to the respondent.

iv. The said services were provided by the respondent to Verizon US on its own account and on principal-to- principal basis.

v. There was no privity of contract between the respondent and customers of Verizon US.”

11.1 It was submitted by the learned senior counsel, Sri Bagaria,

in the matters where he is appearing for the assessees, that the

periods involved are between January-2011 to June-2012 (pre-

negative list) and July-2014 to September-2014 (post-negative list).

11.2 Learned senior counsel drew our attention to the extant rule

and its amendments during the periods referred to above, as under:

Page 42 of 53 “3. Pre-Negative List Period of January 2011 to June 2012

3.1 During pre-negative list period mentioned above, export of service was governed by the Export of Service Rules, 2005.

3.2 Rule 3 of the Rules provided about “export of taxable service”. Rule 3(1) (i) and (ii) did not apply to the present case and there is no dispute in that regard. Rule 3 (1) (iii) required that the recipient of service is “located outside India”. In the present case Verizon US is located in USA (that is, outside India).

3.3. Rule 3(2) was amended from time to time and relevant portions of the said rule during different periods are set out below:

19.04.2006 to 28.02.2007

“(2) The provision of any taxable service shall be treated as export of service when the following conditions are satisfied, namely –

(a) such service is delivered outside India and used outside India; and

(b) payment for such service provided outside India is received by the service provider in convertible foreign exchange.”

Page 43 of 53 01.03.2007 to 31.05.2007

“(2) The provision of any taxable service specified in subrule (1) shall be treated as export of service when the following conditions are satisfied, namely –

(a) such service is provided from India and used outside India; and

(b) payment for such service provided outside India is received by the service provider in convertible foreign exchange.”

01.06.2007 to 26.02.2010

“(2) The provision of any taxable service specified in subrule (1) shall be treated as export of service when the following conditions are satisfied namely –

(a) such service is provided from India and used outside India; and

(b) payment for such service is received by the service provider in convertible foreign exchange.”

27.02.2010 up to 30.06.2012 (this was during relevant period involved in present case)

“(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) (omitted)

Page 44 of 53

(b) payment for such service is received by the service provider in convertible foreign exchange.”

11.3 Thus, according to the learned senior counsel, the

requirements of “delivered outside India”, “provided outside India”

and “used outside India” have been omitted long prior to the

relevant period. During the relevant period, the only twin

requirements of Rule 3 were the following:

a. the recipient of service is located outside India; and

b. payment for the service is received in convertible

foreign exchange.

11.4 According to the learned senior counsel, both these

conditions were satisfied in respect of the services exported by the

respondent to its overseas customer Verizon US.

11.5 In response to the submissions made by the learned ASG,

appearing on behalf of the Revenue, that even though the

expression “used outside India” was omitted on 27.02.2010, the

issue whether the said condition “could still be applied to the

transaction after the said omission” and the issue whether the

Page 45 of 53 services by respondent assessees were “provided within India” still

remain, learned senior counsel, Sri Bagaria, made the following

submissions:

a) Firstly, requirement of “delivered outside India”, “provided

outside India” and “used outside India” has already been

omitted long prior to relevant period and there can be no scope

to read any such requirement in the rule, even after such

omission.

b) Secondly, during the relevant period, as stated above, the only

twin requirements were that, i) recipient of service is located

outside India; and ii) payment for the service is received in

convertible foreign exchange, and both these requirements were

fully satisfied.

c) The respondent’s contract was with Verizon US, exports were

made to Verizon US, bills were raised by the respondent on

Verizon US and payments in convertible foreign exchange were

made by Verizon US directly to the respondent. The respondent

provided its service on principal-to-principal basis and on its

Page 46 of 53 own account to Verizon US who was the recipient of the service

and who paid for the same. In terms of contract between the

parties, Verizon US alone had the contractual right and liability

to receive the service and pay for the same.

11.6 With regard to the “post negative list” for the period from

07.07.2012 to 2014, learned senior counsel referred to the

amendments made as under:

a) That on 01.07.2012 the old provisions of Rules were

superseded and following new provisions came into force:

i. Rule 6A providing for “Export of Services” was inserted in

Service Tax Rules, 1994 (for short “STR”)

ii. Place of Provision of Service Rules, 2012 came into force.

b) That Rule 6A of STR continued with the earlier requirements

under Rules relating to provider of service being located in

taxable territory, recipient of service being located outside India

and payment being received in convertible foreign-exchange. It

also imposed following new conditions:

i. Service is not specified in section 66D (negative list of

services)

Page 47 of 53 ii. Place of provision of service is outside India,

iii. Provider and recipient are not merely establishments of a

distinct person in accordance with item (b) of Explanation 3

of Section 65B (44).

The learned senior counsel contended that all these conditions

were fully satisfied in respect of the services exported by the

respondent to Verizon US. That the respondent is located in India,

the recipient was located in USA, service provided by the

respondent was not specified in section 66D, payment for the

service was received in convertible foreign exchange and the

provider and recipient were not merely establishments of a distinct

person in any manner.

c) That POP provides for place of provision of service. In this

regard, the submissions were as under:

i. Rule 3 of POP provides that “the place of provision of a

service shall be the location of the recipient of service”. The

expression “location of the service receiver” has been

defined in Rule 2(i) of POP. In the present case, as per the

Page 48 of 53 said definition, location of the service recipient shall be

location of business establishment of Verizon US in USA.

Accordingly, under Rule 3 of POP, place of provision of

service was USA, that is, location of the service recipient.

ii. Rules 4-8 relate to specific cases mentioned in the said

Rules and these are undisputedly not applicable to the

present case.

iii. In the appeal, for the first time, new allegation has been

made that the service provided by the respondent falls

under the category of “intermediary service” under rule 9 (c)

of POP.

iv. Firstly, this was never the case made out by the

Department at any stage. This was not the case either in

the Assistant Commissioner’s order or in the counter-

affidavit filed by the Department before the Hon’ble High

Court. Secondly, the expression “intermediary” has been

defined in rule 2(f) of POP and during the relevant period,

the said definition read as under:

Page 49 of 53 “ “Intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the “main” service”) between two or more persons, but does not include a person who provides the main service on his account”.

v. The said definition is not satisfied in any way in the present

case. The respondent always exported its service to Verizon

US on its own account and on principal-to-principal basis,

raised its bills on Verizon US and received payments in

convertible foreign exchange from Verizon US. The

respondent never acted as a broker or agent not it arranged

or facilitated any service between two or more persons.

There is absolutely no basis or factual foundation for any

such allegation nor any such finding was given by the

authorities below.

vi. The aforesaid submissions of the respondent relating to

meaning and scope of the expression “intermediary” are

also fully supported by the following circulars of the

Government of India, Ministry of Finance which clearly

Page 50 of 53 show that there is no scope to treat the respondent’s export

service as intermediary service:

I. Circular no.230/24/2024-GST dated 10.09.2024;

II. Circular no.232/26/2024-GST dated 10.09.2024;

III. Circular no.159/15/2021-GST dated 20.09.2021; and

IV. Service Tax Education Guide dated 19.06.2012 issued by CBEC.

11.7 It was the contention of Sri Bagaria, learned senior counsel

for the respondent assessee that since the services provided by the

respondent to Verizon US were “export of services”, both under Rule

3 of the Rules during “pre negative list” regime and Rule 6A of STR),

read with Rule 3 of POP (during the post negative list period),

consequential reliefs to the respondent were rightly granted by the

High Court in the said case.

11.8 It was further submitted that SLP(C) No.25415 of 2018 has

been rendered infructuous vide order dated 06.10.2021 passed by

this Court. This was because the dispute was settled by Discharge

Certificate in terms of Sabka Vishwas (Legacy Dispute Resolution)

Scheme, 2019. That in fact, four writ petitions were filed which

Page 51 of 53 were all allowed by the High Court. Out of the four, WP (C)

No.11575 of 2016 related to the show-cause notice No.27/2016

dated 11.11.2016 and the remaining three writ petitions challenged

the orders passed by the Assistant Commissioner, rejecting the

claims for refund of CENVAT credits on export of services.

11.9 In response to these submissions, learned ASG reiterated

that the services rendered by the respondent assessee do not fall

within the parameters of the proviso to sub-rule (3) of Rule 3 of the

Rules and therefore, the CESTAT was not correct in granting them

the benefit of the proviso. It was reiterated that though the service

delivered by the respondent-assessee was outside India,

nevertheless, it was delivered from India and hence there can be no

exemption from payment of service tax.

12. We have analyzed the nature of the activity of the

respondent-assessee in light of the parameters delineated in the

proviso to sub-rule (3) of Rule 3 and as to, whether, the CESTAT

was right in granting benefit of the exclusion from taxable services

to the activities of the respondent assessee as being an activity of

Page 52 of 53 export of service. We find that the CESTAT in all these cases has

rightly analyzed the activity and granted the relief.

13. We also note that in these cases, what has been determined

by the CESTAT are purely findings of facts. We do not find any

perversity in the determination of the findings of facts. In the

circumstances, we find no reason to interfere with the impugned

orders of the CESTAT and the High Court.

14. In the circumstances, we find that the factual determination

made by the CESTAT would not call for any re-determination in

these appeals. Hence, these appeals are dismissed.

….……………………………………..J. (B.V. NAGARATHNA)

….……………………………………..J. (SATISH CHANDRA SHARMA)

NEW DELHI;

MAY 06, 2025.

Page 53 of 53