AI Drafter 
TaxTMI 
TaxTMI 
2016 (9) TMI 986
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.... facts from the Revenue and accordingly, a demand of Rs. 2,29,21,508/- was confirmed for the extended period 2006 -2011 along with interest and also penalty of equal amount jointly under Sections 76, 77 and 78 of Finance Act, 1994. Being aggrieved, the appellant has filed appeal before this Tribunal. 2. The issue in this appeal is whether services provided by the appellant as commission agent for sale of goods of its foreign principal M/s Barco Control Rooms GMBH, Germany on their behalf is to be treated as export of services under Rule 3 of Export of Service Rules, 2005 during the relevant period, i.e. 01.04.2006 to 31.03.2011. 3. The brief facts of the case are that, the appellant is registered with service tax Department, for providing taxable services, namely maintenance and repair service, erection, commissioning and installation services, business support services and GTA services vide registration No. AAACB5865FST001. The appellant had entered into an agreement with Barco, Germany dated 17.12.2003. A copy of the agreement dated 17.12.2003 is enclosed with the appeal folder. The above agreement expired on 31.12.2006 and a new agreement dated 01.01.2007 was entered into ....
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....ect sales of the buyer to the end user is normally calculated on the difference between the buyer transfer price to India and the end user price. However, in practice, the end user price may fluctuate from project to project and many sometimes go below the Buyer transfer price to India due to discounts, etc. Taking the aforesaid into consideration, the Buyer will provide a commission of average, 7% of the end customer sales price. For sales from the buyer to the supplier (sales office India) no commission will apply!" 5. As per the agreement, 'BU' stands for business units of the appellant company all over the world and 'NO' stands for National Organization, which has been used to refer to the marketing divisions of the company. Further, PB' stands for product base used to refer to the manufacturing units of the appellant company. It is further stated that the appellant company is negotiating with the prospective customers of Barco, Germany and procuring the orders from the customers in India. For this purpose, the appellant interacts and liaises with the customers in India by explaining the details of the product of Barco, Germany and ensures t....
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....contended that under the provisions of Rule 3(1) of Export of Service Rules, 2005, they fulfilled all the conditions prescribed under Rule 3(1) and 3(2) as they are a person located in India and have provided services to a person located outside India, such services are for business and commerce, such services have been delivered outside India and used outside India and further payment of such services, have been received in India in convertible foreign exchange. The SCN was adjudicated by the Id. Commissioner, who was pleased to confirm the proposed demand with interest and penalty observing that the ultimate outcome of provision of services by the appellant has reached the consumers in India "buyers of the products of Barco, Germany" and, then, were ultimately to be consumed in India. 8. Further held, the services provided by appellant, were only to the benefit of the consumers of Indian Territory and the same were provided for and on behalf of their parent company in Germany and the end user of such services being located in India and need of such consumers being met by the appellant for and on behalf of foreign principal. Such services have been provided in India and, theref....
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....2-2009, the relevant portions which are quoted here below: "In terms of rule 3(2)(a) of the Export of Services Rules', 2005, a taxable service shall be treated as export of service if "such service is provided from India and used outside India". Instances have come to notice that certain activities, illustrations of which are given below, are denied the benefit of export of services and the refund of service tax under rule 5 of the Cenvat Credit Rules, 2004 [Notification Non 5/2006-C.E. (N.T.), dated 14-03-2006] on the ground that these activities do not satisfy the condition 'used outside India', (i) Call centres.................................................. (ii) Medical Transcription..................................... (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 services from foreign seller in convertible foreign exchange. (iv) Foreign financial institution....................................... The departmental officers seem to have taken a v....