2023 (4) TMI 1195 - AT - Service Tax

Appeal allowed for service tax exemption under Notification No. 14/2004-S.T.

The Tribunal allowed the appeal, holding that the appellant was eligible for exemption under Notification No. 14/2004-S.T. The Tribunal found that the ... Classification of services - business auxiliary service - commission paid to foreign agents - reverse charge mechanism - benefit of exemption under Notification No. 14/2004-S.T. dated 10.09.2004 - HELD THAT:- The assertion of the Learned Advocate for the appellant is found to be correct, as a more or less similar issue has been considered in the light of the very same Notification No. 14/2004-S.T. dated 10.09.2004 by this very Bench in the case of M/s. Texyard International [2015 (8) TMI 794 - CESTAT CHENNAI] where it was held that The exemption of service tax under BAS was allowed in relation to four industries namely agriculture, printing, textile processing and education. Therefore, the appellant being textile industry, it is covered under the category 'textile processing' in the notification. The liaising with customers and getting export orders is itself a ‘procurement of service’ within the meaning of (a) under Notification No. 14/2004 and the same would also amount to provision of service on behalf of the client as per (c) of the above Notification. The findings arrived at by the lower authority that the activities of the foreign agents would not amount to any taxable service under Notification No. 14/2004, cannot be agreed upon. The denial of the benefit of exemption under Notification No. 14/2004 by the lower authority is not sustainable, for which reason the same is set aside - Appeal allowed. Issues involved: The issue in this case is whether the appellant is eligible for exemption in terms of Notification No. 14/2004-S.T. dated 10.09.2004.Summary:The appellant, engaged in printing of security documents and papers, paid agency commission to foreign agents for procuring export orders. A Show Cause Notice was issued proposing to demand Service Tax on the commission under 'business auxiliary service'. The Adjudicating Authority confirmed the demands, leading to the appellant's appeal.The appellant claimed exemption under Notification No. 14/2004-S.T. dated 10.09.2004. The Advocate cited various cases where similar issues were settled in favor of the assessee. The Tribunal considered the scope of services provided by the foreign agents, concluding that liaising with customers and obtaining export orders constituted a taxable service under the Notification.The Tribunal held that the denial of exemption by the lower authority was not sustainable based on the interpretation of Notification No. 14/2004-S.T. in previous cases. Consequently, the appeal was allowed with consequential benefits, if any, as per law.(Order pronounced on 26.04.2023)