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2. The issue involved in the present case is that the appellant against export of service, received payment for the services in Indian rupees from Deutsche Bank and FIRCs issued by the bank has been produced before the lower authorities, whether in respect of such remittance refund is admissible under Export of Service Rules, 2005. The second issue is whether the security services and air travel services used by the appellant is an input service for providing output service which were exported. The learned Commissioner (Appeals), in the impugned order, relied upon the judgment in the case of ETA Travel Agency Pvt. Ltd. vs. Commissioner of Central Excise, Chennai 2007 (7) STR 454 (Tri.-Bang.) and held that since the appellant has not received the service charges from overseas entity in convertible foreign exchange whereas the payment was received in Indian rupees, the condition of Rule 3(2) of Export of Service Rules, 2005 was not complied with and accordingly the services will not be treated as export of services. Therefore, the appellant is not entitled for the refund.

3. Shri Prasad Paranjape, learned counsel for the appellant submits that though the payment for the export services were received in Indian rupees but the same were received through Deutsche Bank who have issued Foreign Inward Remittance Certificate (FIRC), as statutorily provided under Exchange Control Manual of Reserve Bank of India. It is his submission that in the FIRCs it was certified that:

We also certify that the payment thereof has not been received in non-convertible rupees or under any special trade or payments agreements. 3.1. As per the said certificate thought the payment is in India rupees but the same is received in convertible foreign exchange from abroad through banking channel. Therefore, it cannot be said that merely because the payment was received in Indian rupees it is not a convertible foreign exchange. He referred to Exchange Control Manual wherein the issuance of such FIRC is statutorily provided in the case of receipt or remittance of foreign exchange. As per Clause 3A.6 of Exchange Control Manual of RBI, according to which the FIRC is issued in respect of remittance of foreign exchange. It is his submission that since in the present case FIRCs have been issued, though the payment received is not in foreign currency, in case of payment other than in foreign exchange, the dealer/bank is not authorised to issue any FIRC. He submits that as per Notification No. FEMA 9/2000-RB dated 3rd May, 2000 issued by Reserve Bank of India under Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 it is provided that when a person receives in India, payment in rupees from the account of the bank or any exchange house situated in any country outside India, maintained with authorised dealer, the said person shall be deemed to have repatriated the realized foreign exchange to India. This establishes that even though the payment was received in Indian rupees but since the remittance has come from the country outside India and it was through the account of a bank, in the present case, it is Deutsche Bank, who is the authorised dealer, the payment shall be treated as convertible foreign exchange.

6. From the above provision it is clear that Foreign Inward Rmittance Certificate (FIRC) is issued only in respect of foreign exchange. In the present case, FIRCs were issued and there is a specific certification that the payment has not been received in non-convertible rupees, which establishes that the payment received and mentioned in the FIRCs are other than non-convertible foreign exchange, in other words, the payment is in convertible foreign exchange. I have gone through the Notification No. FEMA 9/2000-RB dated 3rd May, 2000, the relevant para No.4 of the said Notification is reproduced below: