Textile processing exemption bars service tax on foreign agent commission for export orders, and the demand was set aside.

Service tax on commission paid to foreign agents for procuring export orders was held not sustainable because the services were treated as connected with textile processing and covered by Notification No. 14/2004-ST dated 10.09.2004. The Tribunal followed its earlier view in the assessee's own case involving export of yarn, applying the same exemption reasoning and holding that the demand beyond the relevant date could not be sustained. The impugned orders were set aside.

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Issues: Whether service tax demand under Business Auxiliary Service on commission paid to foreign agents for procuring export orders was sustainable in view of the exemption for services related to textile processing.

Analysis: The issue was treated as identical to an earlier order in the assessee's own case. The Tribunal followed its prior view that, where the appellants were manufacturers exporting yarn and the services were connected with textile processing, Notification No. 14/2004-ST dated 10.09.2004 granted exemption. On that basis, the earlier decision had held that the demand beyond the relevant date was not sustainable, and the same reasoning governed the present appeals.

Conclusion: The service tax demand was not sustainable and the impugned orders were set aside.

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