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Liability to pay service tax for services provided to a foreign entity. The appellant argued that their turnover within the domestic market was below the threshold limit, and they were not required to pay service tax. The adjudicating authority partially dropped the demand but confirmed the service tax demand along with interest and penalty. The tribunal held that for 'Business Auxiliary Services' or 'Business Support Services,' if the services are provided to an entity abroad and the consideration is received in convertible foreign exchange, they are exempted from service tax as per the Export of Services Rules 2005 and Board Circular. Since these conditions were met in the present case, the confirmed demand was set aside. Regarding 'Erection, Commissioning and Installation Services,' the appellant's turnover from 2008-09 to 2011-12 was below the threshold limit, and hence no service tax was payable. For 2012-13, the appellant had already paid the required service tax, considering the threshold exemption. Therefore, the confirmed demand for this period was set aside. The tribunal also set aside the confirmed demand for the extended period, as the appellant had declared foreign exchange earnings, was registered for service tax, and filed returns, and the department failed to establish suppression of facts.
Liability to pay service tax for services provided to a foreign entity. The appellant argued that their turnover within the domestic market was below the threshold limit, and they were not required to pay service tax. The adjudicating authority partially dropped the demand but confirmed the service tax demand along with interest and penalty. The tribunal held that for 'Business Auxiliary Services' or 'Business Support Services,' if the services are provided to an entity abroad and the consideration is received in convertible foreign exchange, they are exempted from service tax as per the Export of Services Rules 2005 and Board Circular. Since these conditions were met in the present case, the confirmed demand was set aside. Regarding 'Erection, Commissioning and Installation Services,' the appellant's turnover from 2008-09 to 2011-12 was below the threshold limit, and hence no service tax was payable. For 2012-13, the appellant had already paid the required service tax, considering the threshold exemption. Therefore, the confirmed demand for this period was set aside. The tribunal also set aside the confirmed demand for the extended period, as the appellant had declared foreign exchange earnings, was registered for service tax, and filed returns, and the department failed to establish suppression of facts.
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