Tribunal Confirms Services to Foreign Companies as Export, Exempting Them from Indian Service Tax.

The Tribunal upheld the decision of the Adjudicating Authority and the Bombay HC, determining that the services provided by the appellant to foreign companies qualify as an export of service. The Tribunal found that these services were consumed by the foreign companies abroad, not in India, despite the service receiver being located in India. Consequently, the services are not liable for service tax under the category of Business Auxiliary Service. The appeal filed by the Revenue was dismissed, affirming the non-taxability of the services as they were deemed to be consumed outside India.

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Issues involved:
The issue in this case involves determining whether the services provided by the appellant to foreign companies for marketing and sales promotion, where the service receiver is located in India, are liable to service tax under the category of Business Auxiliary Service.

Comprehensive details of the judgment:

1. The appellant received an amount from Foreign Companies for services provided in India, leading to a show cause notice being issued by the department for service tax under Business Auxiliary Service.

2. The Revenue argued that since the service was provided and consumed in India, there was no export of service, making it taxable under Business Auxiliary Service.

3. The Respondent cited various judgments to support their claim that the services provided to foreign companies constitute an export of service.

4. The Adjudicating Authority held that the service provided by the appellant qualifies as an export of service, based on previous judgments, which was upheld by the Bombay High Court.

5. The Revenue's appeal against the judgment was based on the filing of an appeal before the Supreme Court, but it was found that the merit and facts of the case were directly applicable to the present case.

6. It was argued that the service was consumed by the foreign companies abroad, not in India, as the Indian customers purchasing goods from foreign companies were not the recipients of the services provided by the appellant.

7. The Tribunal supported the findings of the Adjudicating Authority, emphasizing that the service was consumed abroad by the foreign companies, and upheld the impugned order while dismissing the appeal filed by the revenue.

This judgment highlights the importance of analyzing the location of service consumption and the recipient of services in determining the tax liability under Business Auxiliary Service for services provided to foreign companies. The Tribunal's decision was based on a thorough examination of relevant case laws and factual circumstances, ultimately affirming the export of service in this particular case.

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