Hannover Re Consulting Services India P. Ltd vs Commissioner Of CGST, Mumbai East

Anil G. Shakkarwar, Member (T)

Brief facts of the case are that 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. Learned original authority issued a personal hearing-cum-deficiency memo dated 05.12.2017 to the appellant asking to clarify why the said claims should not be rejected for not fulfilling the export criteria under Rule 6A of Service Tax Rules, 1994. Appellant submitted their detailed submissions vide letter dated 26.12.2017. Original authority passed order-in-original dated 08.01.2018. The original authority has held that the appellant was providing intermediary service and the same is not export in terms of Rule 6A of Service Tax Rules, 1994 and, therefore, rejected the claims. The said order was challenged before learned Commissioner (Appeals). The said appeal was decided through the impugned order. Learned 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. Aggrieved by the said order, appellant is before this Tribunal.

Heard the learned counsel for the appellant. Learned counsel for the appellant has submitted that the appellant is providing services to Hannover Ruchversicherung, Germany. The said German company is in the business of reinsurance. The clients of German company are LIC, GIC etc. Appellant is providing certain services to German company which helps the German company to enhance its business and further elaborated that the appellant provides inputs in relation to reinsurance markets in India, social, economical, political, legal and regulatory environments and key developments and events that may impact business of German company in India. He has further submitted that the appellant itself cannot render reinsurance services as the same is not permitted by IRDA. He has further submitted that the appellant does not have any power to bind the reinsurer and thus the basic characteristics of an agency relationship does not exist between the appellant and the German company. He has also submitted that the appellant is not concerned in respect of services rendered by German company to Indian customers. He has further argued that in view of the nature of service provided by the appellant to German company, the appellant can neither be classified as intermediary nor can be held to be providing service within India. He has submitted that the appellant is receiving consideration in convertible foreign exchange. He has further submitted that for earlier period and subsequent period, under similar circumstances, refund of unutilized cenvat credit was allowed to the appellant and only in respect of five claims related to present appeal were rejected though the nature of activity and the contract between the appellant and the German company are the same. He has further submitted that they have filed their ST-3 return claiming the activity to be export of services and Revenue has not raised any demand of service tax against them claiming their activity to be services provided within India and, therefore, the findings of original and appellant authority are without any basis.

Heard the learned AR for Revenue. Learned AR has 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.

I have carefully gone through the record of the case and submissions made. I have also noted that the activity carried out by the appellant in respect of the German company remained the same for the period for which the present claims are filed and also for the period subsequent to the period for the present claims are filed and for the periods earlier to the present claims and subsequent to the present claims. As submitted by the appellant, refund of unutilized cenvat credit was allowed to the appellant. It is a fact that Revenue has not raised any service tax demand on the appellant for the period of the present appeal and also it is a fact that in respect of the claims in the present appeal, appellant has submitted FIRCs and Bank statement. It can be reasonably 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. I, therefore, set aside the impugned order and remand the matter to the original authority with a direction not to raise the issue of export of service and process the said five claims in accordance with law and allow the refund of eligible amount to the appellant.

In above terms, appeal is allowed by way of remand.