Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai: In a case wherein, appeal filed against the order of rejection of the appellant Tata Realty & Infrastructure Ltd.’s claim for refund of unutilised CENVAT credit available in their books of accounts under Rule 5, CENVAT Credit Rules, 2004 (Rules, 2004), the Division Bench of M.M. Prathiban (Technical Member) and S.K. Mohanty (Judicial Member)* allowed the appeal and held that the appellant had exported the services to the overseas entity/recipient, such service should be considered as “export of service” and the appellant should be availed with accumulated CENVAT Credit available in the books of accounts.
Background
The appellants had entered into an agreement with M/s TRIF Management (Mauritius) Ltd. (TML) for providing investment advisory services. The recipient of service is located in Mauritius. As per arrangements dated 10 December 2007, the services provided by the appellants inter alia, include identifying and advising potential opportunities for investments and updating TML on the performance of the portfolio-companies and furnishing TML with information required for monitoring portfolio-companies. For provision of such services, the appellants had procured various input services on which service tax was duly discharged by the provider of such services. Since the output services were exported by the appellants, there was no scope for utilisation of the accumulated CENVAT Credit and accordingly, the appellants had filed a refund application under Rule 5 of the Rules, 2004 read with the Notification No. 5 of 2006-C.E. (N.T.) dated 14 March 2006 before the jurisdictional service tax authorities, claiming refund of unutilised CENVAT Credit available in their books of accounts.
The refund application filed by the appellants was considered by the original authority and a refund of ₹44,46,438 was sanctioned vide order dated 30 June 2011 as per the provision under Section 11-B, Central Excise Act, 1944, as made applicable to service tax matters through Section 83 of Chapter V of the Finance Act, 1994. The Order was reviewed by the Committee of Commissioners, and it was directed to file an appeal against the adjudication order before the Commissioner (Appeals). The appeal filed by the Revenue was allowed by Commissioner (Appeals), Service Tax. Thus, the present appeal was filed.
The appellants submitted that pursuant to the agreement dated 10 December 2007, the appellants had provided the consulting/advisory services to the overseas entity on “principal to principal basis”, and since no services were provided on behalf of TML to the clients/customers located in India, the requirement of “export of service” as per Rule 3(1)(iii), Export of Service Rules, 2005 was duly complied with for consideration as “export of service”, for which the benefit of refund provided under Rule 5 of the Rules, 2004 should be available. The appellant further submitted that the investment advisory services provided to the foreign entity was to be considered as export of service inasmuch as the services were used outside India for the benefit of overseas entity.
Analysis, Law and Decision
The Tribunal observed that the Commissioner (Appeals) in the impugned order dated 30 November 2016 had rejected the claim of the appellants towards export of service, holding that the appellants were required to provide service in relation to investment opportunities in India and the same were used for investment in connection with an activity of business of Indian companies and their related investment running in India. Since the appellants had charged to the overseas entity in convertible foreign exchange, it could not be said that they had provided any service to the Indian customers/clients belonging to overseas entity.
The Tribunal further observed that the appellants had not entered into any agreement with the clients/customers of the overseas entity, i.e., TML, for provision of any specific services to them. The appellants had issued invoices in favour of the overseas entity, claiming their service charges in foreign currency, i.e., US dollar. Thus, the requirement of export of service was duly complied with for consideration of the provision of service as export.
The Tribunal relied on Goldman Sachs (India) Securities (P) Ltd. v. CST, 2024 SCC OnLine CESTAT 2374, wherein, it was held that investment advisory services provided to overseas entity was to be considered as “export of service”, as the services were used outside India. The Tribunal held that in view of the fact that the appellant had exported the services to overseas entity/recipient, such service should be considered as “export of service” and the resultant benefit of refund of the accumulated CENVAT Credit available in the books of account should be available to the appellants. The Tribunal set aside the impugned order and allowed the appeal.
[Tata Realty & Infrastructure Ltd. v. CST, Final Order No. 85868 of 2026, dt. 7-7-2026, (CESTAT)]
*Order by S.K. Mohanty, Judicial Member
Advocates who appeared in this case:
For the Appellant(s): S.S. Gupta, Advocate
For Respondent(s): Dhananjay Dahiwale, Authorized Representative
