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of <h1>Partial Waiver of Pre-Deposit Granted for Fanuc India Pvt. Ltd. in CESTAT Case</h1> The Appellate Tribunal CESTAT, Bangalore granted partial waiver of pre-deposit for dues adjudged against M/s. Fanuc India Pvt. Ltd. The Tribunal ... Demand of service tax, interest u/s 75 along with penalty u/s 76 and 78 - Business Auxiliary Services - Indian entrepreneurs engaged foreign agents to canvass orders for their products which are exported against such orders - Such services are taxed when imported; the Indian recipient pays service tax under the reverse charge mechanism - When services are similarly provided to a foreign enterprise by Indian agents, it cannot be held that export of services is not involved - As per the case of IBM India (P.) Ltd. v. CCE, support the claim of the assessee on export of services - Hence, the appellants are not liable to pay service tax and interest thereon and penalty imposed on them -Accordingly, waiver of pre-deposit and stay and recovery of dues - Hence, the appeal in favour of assessee. Maintenance and Repair Services - Maintenance and Repair Services were performed entirely in India - Such services were also delivered in India - The MRS involved do not prima facie qualify for benefit of services exported - Accordingly, the demand to the related to MRS and interest sustainable - Pre deposit ordered in partly. Issues:1. Waiver of pre-deposit of dues adjudged against M/s. Fanuc India Pvt. Ltd.2. Classification of services under 'Business Auxiliary Services' and 'Maintenance or Repair Services'.3. Determination of export status of services provided by M/s. Fanuc India Pvt. Ltd.4. Applicability of penalties and interest on the dues imposed.Issue 1: Waiver of Pre-depositThe Appellate Tribunal considered two applications filed by M/s. Fanuc India Pvt. Ltd. seeking waiver of pre-deposit of dues adjudged against them. The impugned order imposed various dues on the company, including Service Tax, interest, and penalties. The Tribunal analyzed the demands and decided on the waiver based on the specific circumstances of each case.Issue 2: Classification of ServicesThe Commissioner found that M/s. Fanuc India Pvt. Ltd. had rendered services classifiable under 'Business Auxiliary Services' and 'Maintenance or Repair Services' during specific periods. The company had agreements with a foreign entity for marketing, sales promotion, and maintenance services related to certain products. The Commissioner confirmed demands under these categories, rejecting the claim that the services were exported.Issue 3: Determination of Export StatusIn the case of services provided in relation to products manufactured and exported by a foreign client, the Tribunal referred to a Board Circular clarifying that such services should be treated as exports if the beneficiary is based abroad. The Tribunal cited relevant legal principles and Circulars to establish that services benefiting foreign clients should be considered as exports. It held that the impugned services rendered by M/s. Fanuc India Pvt. Ltd. accrued outside India, thus qualifying as exports.Issue 4: Applicability of Penalties and InterestRegarding penalties and interest imposed on the dues, the Tribunal examined the conditions for services to constitute export, including physical performance outside India, delivery outside India, and usage outside India. It found that Maintenance or Repair Services performed entirely in India did not qualify for export benefits. The Tribunal upheld the demand related to these services and ordered payment within a specified period, while waiving pre-deposit for the remaining amounts pending appeal decision.This judgment by the Appellate Tribunal CESTAT, Bangalore addressed the waiver of pre-deposit, classification of services, determination of export status, and the applicability of penalties and interest in the case of M/s. Fanuc India Pvt. Ltd. The Tribunal carefully analyzed the nature of services provided by the company, considered legal principles and Circulars related to export status, and made decisions based on the specific circumstances and legal interpretations presented during the proceedings.
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