Tribunal overturns order on service tax waiver, finding appellant's foreign exchange commission exempt.

The Tribunal allowed the appeal in favor of the appellant, setting aside the impugned order regarding the waiver of pre-deposit of service tax and penalty amount. It was determined that the commission received in foreign exchange by the appellant was exempt from service tax liability during the relevant period, as it was considered outside the purview of service tax. The Tribunal found that the first appellate authority had not properly considered the evidence of payments in foreign exchange, leading to the decision to overturn the initial ruling.

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Issues:
- Stay application for waiver of pre-deposit of service tax and penalty amount
- Tax liability on commission received in foreign exchange

Analysis:
1. The appellant filed a stay application seeking waiver of pre-deposit of an amount towards service tax and penalty. The adjudicating authority and the first appellate authority confirmed the amount, considering it as commission liable for service tax under Business Auxiliary Services category.

2. The Tribunal found that the issue involved was narrow and could be disposed of at that stage. After allowing the application for waiver, the Tribunal proceeded with the final disposal of the appeal.

3. Upon reviewing the submissions and evidence, it was revealed that the appellant received an amount in foreign exchange from a supplier of goods situated up country. The evidence included advice from the Bank of Baroda regarding payment from Danske Bank, Denmark. The Tribunal noted that any commission received in convertible foreign exchange, whether in Indian rupees or foreign currency, was exempt from service tax liability until July 2004.

4. The Tribunal observed that the first appellate authority did not properly consider the evidence of payments in foreign exchange. As the amount received by the appellant in foreign exchange was to be treated as commission, it was outside the purview of service tax liability during the relevant period. Therefore, the impugned order was found to be not in accordance with the law and was set aside.

5. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. The judgment was dictated and pronounced in court by the Tribunal.

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