TaxTMI 
TaxTMI 
2015 (9) TMI 363
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....p; Whether the 2nd respondent Tribunal is justified in directing pre-deposit of the amounts, when the services rendered by the appellant both under the Passenger Sales Agreement and the Cargo Sales Agreement would come within the purview of export of services and, hence, not taxable. (ii) Whether the 2nd respondent is justified in its order which has been passed overlooking the fact that directing the appellant to pay Service Tax on the commission and incentives earned by IATA agents would amount to double taxation since the IATA agents have already effected Service Tax on the same under the category Business Auxiliary Services, and raised debit memos on SAA (the service receiver abroad) for reimbursement, of the amounts paid by them towards Service Tax. (iii) Whether the 2nd respondent would be correct, in directing pre-deposit of the amounts despite observing that the issue as to whether incentives paid to the cargo agents are to be included in the appellant's taxable value is debatable. (iv) Whether the 2nd respondent's order would be sustainable since the show cause notice bearing No. 530 of 2009 for the period April, 200....
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....on of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him which would therefore not include the incentive and commission paid to the IATA agents as a part of the appellant's taxable value." 4. The appellant-assesses in this case is a general sales agent, in respect of cargo sales and passenger sales under an agreement with Saudi Arabian Airlines Corporation (for short 'SAA') based on General Sales Agency Agreement dated 1-5-1984 and 1-10-2004. Based on the said agreement, the appellant engaged in direct sales of air tickets and from the year 1997 they have been remitting Service Tax on the commission earned by them on such direct sales. The appellant-assessee has registered itself with the Service Tax department in this regard. 5. The issue, which now arises for consideration is with regard to the commission received by the appellant, which is termed as 'overriding commission' in respect of passenger sales and cargo sales and commission paid to IATA agents and incentive paid to IATA agents. It is the case of the appellant that major part of the passenger tickets are sold thro....
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....o 31-3-2008 and 1-4-2008 to 31-3-2009 and overriding commission of 2.5% in respect of cargo sales from 1-4-2007 to 31-3-2008 and 1-4-2008 to 31-3-2009, would not fall under export of taxable service, the effect of Service Tax liability insofar as overheads, viz., 5% commission paid by SAA to IATA agents for the relevant periods and the incentive paid to IATA agents for the very same period should be excluded for the purpose of Service Tax, on the ground that those amounts have already suffered Service Tax liability at the hands of the IATA agents, who are also, according to the appellant, registered payers of Service Tax. In such view of the matter, the Tribunal, on a brief order, without discussing the prima facie case, has directed the appellant to pre-deposit a sum of Rs. 35 lakhs from and out of the total amount of Rs. 1,31,45,172/-, demanded as Service Tax together with interest and penalty. This order of the Tribunal directing pre-deposit of a sum of Rs. 35 lakhs would cause undue hardship to the appellant, as it has already discharged the Service Tax liability insofar as direct sales is concerned and this issue has to be decided by the Tribunal on merits. 10. Heard M....
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....p; those specified in clause (i) of this rule except, when the provision of taxable services specified in sub-clauses 8(d), (zzzc), (zzzr) and (zzzzm)] does not relate to immovable property; and (c) those specified in clause (ii) of this rule, when provided in relation to business or commerce, be provision of such services to a recipient located outside India and when provided otherwise, be provision of such services to a recipient located outside India at the time of provision of such service Provided that where such recipient has commercial establishment or any office relating thereto, in India, such taxable services provided shall be treated as export of service only when order for provision of such service is made from any of his commercial establishment or office located outside India. Provided further that where the taxable service referred to in sub-clause (zzzzj) of clause (105) of Section 65 of the Act is provided to a recipient located outside India, then such taxable service shall be treated as export of taxable ....
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....when all the relevant activities take place in India so long as the benefits of 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." 13. Keeping in mind the above rule and the circular issued by the Government of India, this Court has analysed the case on hand threadbare. Even if we accept the plea of Service Tax liability in respect of overriding commission relatable to passenger sales and cargo sales is concerned, at best it could be only Rs. 60 lakhs approximately as could be seen from the tabulation, which is extracted hereinbelow :- Period Taxable Value Service Tax Education Cess In Rs. In Rs. In Rs. 1-4-2007 to 31-3-2008 2,91,56,881 34,98,825 1,04,966 1-4-2008 to 31-3-2009 2,00,91,980 23,86,324 71,590 TOTAL 58,85,149 1,76,556 14. In the above circumstances, we find much force in the plea of the appellant that Circular No. 111, dated 24-2-2009 issued by th....
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....t has become an unfortunate trend to casually dispose of stay applications by referring to decisions in Siliguri Municipality v. Amalendu Das - (1984) 2 SCC 436 and CCE v. Dunlop India Ltd. - (1985) 1 SCC 260 cases without analysing factual scenario involved in a particular case. 10. Section 35F of the Act reads as follows : "35F. Deposit, pending appeal, of duty demanded or penalty levied. - Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise Authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit, with the adjudicating authority the duty demanded or the penalty levied : Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeg....