CLR Editorial Note: This is an appeal by Wipro Ltd., which was formerly known as Wipro BPO Solutions. It was at the material time engaged in the rendering of IT-enabled services such astechnical support services, back-office services, customer-care services etc. to its various clients all of whom were situated outside India, i.e., in UK, USA and Australia.
This appeal arose out of the order passed by the CESTAT regarding the Service Tax liability of a particular transaction. The appellant lodged two claims claiming rebate in respect of service tax paid on input services. The input services were mainly the night transportation services, recruitment services, bank charges etc. Two separate show-cause notices were issued for two different claim periods calling upon the appellant to show cause why the rebate claims should not be rejected on the ground that the declaration was not filed prior to the date of the export of taxable service. The appellant also pointed out in the replies that the requirement of filing the declaration prior to the date of the export of the services was a procedural requirement which could not be complied with due to practical difficulties. It was submitted that since there was substantial compliance with the law and no fault or irregularity having been found in the details furnished in the rebate claims, the rejection of the rebate claims would not be justified.
After repeated appeals were rejected first by the the Deputy Commissioner, Service Tax, Delhi-II, and subsequently the Commissioner of Central Excise (Appeals), New Delhi and CESTAT, the appeal came to the High Court.
Wipro appealed to the Hon’ble High Court of Delhi, based on the facts held:
If, having regard to the nature of the business and its peculiar features which are not in dispute the description, value and the amount of service tax and cess payable on input-services actually required to be used in providing the taxable service to be exported are not determinable prior to the date of export but are determinable only after the export and if, further, such particulars are furnished to the service tax authorities within a reasonable time along with the necessary documentary evidence so that their accuracy and genuineness may be examined, and if those particulars are not found to be incorrect or false or unauthenticated or unsupported by documentary evidence, we do not really see how it can be said that the object and purpose of the requirement stand frustrated. In the present case, no irregularity or inaccuracy or falsity in the figures furnished by the appellant both on 05.02.2007 and in the rebate claims has been alleged. Moreover, it appears to us somewhat strange that none of the authorities below has demonstrated as to how the appellant could have complied with the requirement prior to the date of the export of the IT-enabled services.
We clarify that our decision rests on the facts of the case and on the peculiar nature of the business of the appellant and that we have not decided the broader question whether the requirement of paragraph 3 of the Notification No.12/2005-ST dated 19.04.2005 is merely procedural and hence directory or is substantive and hence mandatory.
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