TaxTMI 
TaxTMI 
2009 (12) TMI 304
X X X X Extracts X X X X
X X X X Extracts X X X X
....11,431/- (ii) Interest under Section 75 of the Finance Act, 1944. (iii) Penalty @ Rs. 200/- for every day during which the default continued and @ Rs. 200/- per day or 2% of such tax per month whichever is higher under Section 76 of the Act. 2. The facts of the case are that the appellants are engaged in promotion of sales of computers and peripherals of M/s. IBM, World Trade Corporation, USA (IBM, USA). During the period from April, 2007 to September, 2007, they received commission from IBM, USA for such services rendered. The appellants were also engaged in provision of call centre services for its client. The appellants had shown an amount of Rs. 99,93,51,548/- in their ST-3 returns for the material period as receipt against 'ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of an amount of Rs. 9,85,11,431/- along with applicable interest. 3. The impugned order has been assailed on various grounds by the appellants. The show cause notice issued had proposed to levy Service tax on marketing commission received by the appellants and the same did not cover Business Transformation Outsourcing services (call centre service). The impugned order did not give any rational finding not to treat the impugned services as exports. The appellants were not heard on taxability of BTO services. The order was not sustainable to the extent it covered BTO services. They relied on various judicial authorities in support of the plea that an order containing a finding without appropriate proposals in the show cause notice was not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such services,, the location of the service recipient was relevant and not the place of performance of services. The Circular went on to clarify that these services would qualify to be export of service because the benefit of such service was being accrued outside India, i.e. promotion of business was of a foreign company situated outside India. Relying on various case law, it is highlighted that the Circular of the Board was binding on the adjudicating authority. 5. We have carefully considered the case records and the rival submissions. The Ld. Counsel for the appellants reiterated the grounds raised in the appeal. Ld. JCDR submitted that the provision of service was the taxable event which had taken place in India. In the light of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... denied the benefit of export of services and the refund of Service tax under Rule 5 of the Cenvat Credit Rules, 2004 [Notification No. 5/2006-CE. (NT.), dated 14-3-2006] on the ground that these activities do not satisfy the condition 'used outside India',- (i) Call centers engaged by foreign companies who attend to calls from customers or prospective customers from all around the world including from India; (ii) Medical transcription where the case history of a patient as dictated by the doctor abroad is typed out in India and forwarded back to him; (iii) Indian agents who undertake marketing in India of goods of a foreign seller. In this case, the agent undertakes all activities within India and receives commission for his servi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erformed) outside India. (iii) Category III [Rule 3(1)(iii)] For the remaining services (that would not fall under category I or II), which would generally include knowledge or technique based services, which are not linked to an identifiable immovable property or whose location of performance cannot be readily identifiable (such as, Banking and Other Financial services, Business Auxiliary ser vices and Telecom services), it has been specified that they would be 'export', - (a) If they are provided in relation to business or commerce to a recipient located outside India; and (b) If they are provided in relation to activities other than business or commerce to a recipient located outside India at the time when such services are prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....these services accrue outside India. In all the illustrations mentioned in the opening paragraph, what is accruing outside India is the benefit in terms of promotion of business of a foreign company. Similar would be the treatment for other Category III [Rule 3(1)(iii)] services as well" 7. We find that in the instant case, the benefit of the impugned services rendered accrued to IBM, USA. Therefore, in terms of the Circular cited the impugned services had been exported. In the All India Tax Practitioner of India case (supra) cited their lordships observed that applying the prix of equivalence. there was no difference between production or manufacture of saleable goods and production of marketable/saleable services in the form of an acti....