'Merchant exports can be counted towards export obligation'

However, one needs to fulfil all the conditions laid down in Para 5.10 of the Handbook of Procedures, Vol. 1

We are manufacturer-exporters of engineering goods and we pay a consultant in Germany for engineering services (CAD/CAM Design Charges). Do we need to pay service tax on Reverse Charge Mechanism (RCM)? What is the proportion and percentage of payment that we need to make? Can we avail ourselves of Service Tax input credit for the same?
As per Rule 2(d)(i)(G) of Service Tax Rules, 2004, in relation to any taxable service provided or agreed to be provided by any person which is located in a non-taxable territory and received by any person located in the taxable territory, the recipient of such service is the person liable to pay service tax. As per S.No. 10 of the Table given in notification no. 30/2012-ST dated June 20, 2012, the extent of service tax payable in such cases is 100 per cent. So, you have to pay full service tax under RCM. You can take Cenvat Credit if the service is used directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal.

 
As manufacturer-exporters, we have cleared imported machinery at zero duty under Export Promotion Capital Goods (EPCG) authorisation, but we are unable to market our goods abroad and so we are unable even to maintain the annual average exports. Can we now manufacture goods using the machines imported under EPCG authorisation and export the goods through another exporter and fulfil our export obligation?
Yes, your export through merchant exporter can be counted towards discharge of export obligation, provided that you fulfil all the conditions laid down in Para 5.10 of the Handbook of Procedures, Vol. 1
 

We refer to Notifications No. 6/2015-C.E. (N.T.) and 8/2015-C.E. (N.T.), both dated March 1, 2015, through which the meaning of export was explained as taking goods out of India to a place outside India in both Rule 5 of Cenvat Credit Rules, 2004 (CCR) and Rule 18 of Central Excise Rules, 2002 (CER). Can we now claim rebate of duty on goods cleared from the Domestic Tariff Area (DTA) to a Special Economic Zone (SEZ) or refund of accumulated Cenvat Credit when goods are cleared from DTA to SEZ?

CBEC Circular no. 1001/8/2015-CX dated April 28, 2015 has clarified that any licit clearances of goods to an SEZ from the DTA will continue to be export and therefore be entitled to the benefit of rebate under Rule 18 of CER, 2002 and of refund of accumulated CENVAT credit under rule 5 of CCR, 2004, as the case may be.
 
Can our request for factory stuffing permission for export of goods be denied on the grounds that we have been issued a show cause notice under Central Excise, Customs, Service Tax or any other allied laws?
You may refer to Public Notice No. 15/2015 dated February 20, 2015, issued by Jawaharlal Nehru Customs House, Nhava Sheva, which details cases of a serious nature when letter of factory stuffing permission can be denied.