By TIOL News Service

MUMBAI, SEPT 19, 2014: REVENUE is in appeal before the CESTAT against the order passed by the lower appellate authority sanctioning refund of Rs.36,44,18,798/- to the respondent by allowing their appeal. The refunds were sanctioned pursuant to the decision of the Tribunal in the respondent's own case reported in 2013-TIOL-566-CESTAT-MUM wherein it was held that the provision of telecommunication service to international roamers would amount to export of service.

The AR submitted that provision of roaming facility to international roamers travelling in India would not amount to export and, therefore, the refunds/rebates are not permissible in law.

However, when a question was put to the AR by the Bench as to whether the order of the Tribunal in the respondent's own case has been challenged and whether any stay has been obtained, the AR submitted that revenue has gone in appeal against the Tribunal's order but no stay has been obtained.

The respondent assessee submitted that in their own case 2013-TIOL-566-CESTAT-MUM the Bench had held that the service provided to customers of the foreign telecom service provider as international inbound roamers while they are in India using the respondent's telecom network, is export of service under the Export of Service Rules, 2005 and the principles of unjust enrichment would not apply to such export transactions. It is further informed that the appeal against the said order of the Tribunal has not been admitted by the Bombay High Court and is listed for rejection at the pre-admission stage before the Registry. Inasmuch as the law as interpreted by the Tribunal is the law prevailing on date and, therefore, the order of the lower appellate authority allowing the refund claims is clearly sustainable. It is, therefore, pleaded that the appeals filed by the Revenue be dismissed.

The Bench observed -

"4.1 It is not in dispute that the service rendered by the respondent is the telecom service provided to customers of foreign telecom service provider as international inbound roamers while they are in India. Such services have been held to be services provided to foreign telecom service providers for which consideration has been received in convertible foreign exchange. Therefore, this Tribunal in the order cited supra held them to be export of services in terms of the Export of Service Rules, 2005 following the precedent decision of the Tribunal in the case of Paul Merchants Ltd. 2012-TIOL-1877-CESTAT-DEL. Thereafter, the same ratio has been followed by this Tribunal in a series of decisions in GAP International Sourcing (I) Pvt. Ltd vs. Comm of ST 2014-TIOL-465-CESTAT-DEL, Simpra Agencies 2014-TIOL-687-CESTAT-DEL, SGS India Pvt. Ltd. 2014-TIOL-580-HC-MUM-ST. Therefore, in the present case also, the transaction is one of export and the appellant is rightly entitled for refund/rebate of the service tax paid in respect of such transactions"

Holding that there is no merit in the appeals filed by the revenue the same were dismissed.

Noting that huge amounts of refund were kept pending, the Bench directed the Jurisdictional Asst. Commissioner to dispose of the rebate/refund claims within a period of one month from the date of receipt of the order.

(See 2014-TIOL-1794-CESTAT-MUM)