AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 973
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.... The appellants then transfer the L/C to the exporter with an instruction to the Banker and the exporters that the amount of L/C includes the commission of the appellant. After export, the exporter transfers the commission to the appellants in INR. In cases, the foreign buyer remits the commission to appellants in freely convertible foreign exchange. 2. The Department on the basis of intelligence gathered issued a SCN dated 24.09.2004 covering period 09.07.2004 to March 2007 on the allegations that the appellants provided services falling under Business Auxiliary Service and that the consideration received by them was not in convertible foreign exchange and thus, are not exempted from payment of Service Tax. Thereafter, 9 periodical Show Cause Notices, covering a period up to March 2014, were issued. All the SCNs were confirmed except the one (Relating to appeal at S/No. 10 below) were confirmed by OIO and/or OIA. The lists of appeals are as below: SI. NO. Appeal No. Period 1. ST/185/2010 09.07.2004 to 31.03.2007 2. ST/440/2011 Apr 07 to Mar 08 3. ST/439/2011 Apr 08 to Sept 08 4. ST/993/2012 Oct 08 to Mar 09 5. ST/25926/2013 Apr 09 to Mar 10 6. ST/25927/2013 A....
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....vices of appellants were termed as intermediary services and as per Rule 3, the place of supply of services for intermediary services was defined to be the location of the recipient of services. (h) CBEC vide circular F. No. B1/4/2006-TRU dated 19.04.2006 has clarified at para 4.3.5 that 'service specified under Rule 3(1)(iii) (under which the appellant's service falls) were exempt when provided in relation to business or commerce, should be provided to a recipient of service who is located outside India. 4. He submitted that overall during the period of dispute, the three conditions that required to be satisfied were; (a) The recipient of service should be located outside India. (b) The services were delivered outside India and used outside India and (c) The consideration for services is received in convertible foreign exchange. He submitted that they have complied with all the above conditions. 4.1 The learned counsel for the appellants submitted that it is not disputed that the provider of service, appellants, are located in India, the recipient of service is the foreign principal located outside India, the services provided are not covered in the negative list, place....
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.... Muthoot Fincorp Ltd. Vs. Commr. of C.Ex, Visakhapatnam, 2010 (17) STR 303 (Tri. Bang.). (iii) C.R. Narayan Rao Vs. CST, Chennai, 2009-TIOL-1490-CESTAT-MAD. 4.4 He submitted that the appellant got registered themselves in 2004 itself and vide letter dated 03.12.2004 itself informed the Department that their services qualified as export and that they are not collecting and remitting the tax. It was also informed that the consideration would be received through Indian exporter. In view of the above, it is very clear that the Department was well aware of the appellant's business service. The extended period cannot be invoked and penalty cannot be imposed. He relied upon the following cases: (i) Pahwa Chemicals Pvt. Ltd. Vs. CCE, Delhi 2005 (189) ELT 257 (SC). (ii) Padmini Products Vs. Collector 1989 (43) ELT 195. (iii) UOI Vs. Rajasthan Spinning and Weaving Mills, 2009 (238) ELT 003 (SC). (iv) CCE, Chandigarh Vs. Pepsi Foods Ltd. 2010-TIOL-109-SC-CX-LB. 5. The learned AR for the Department has reiterated the findings of OIO and OIA. He also submitted that the decision of the Tribunal in the case of Paul Merchant Ltd. Vs CCE, 2013 (29) STR 257 (Tri. Del) is under chall....
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....ision having the same binding criteria as that of Larger Bench. If that be so, the majority decision in the case of Paul Merchant is required to be followed. (Para 51) Even otherwise also, I find that the disputed service is the service being provided by the appellant to his principal located in Singapore. The marketing operations done by the appellant in India cannot be said to be at the behest of any Indian customer. The service being provided may or may not result in any sales of the product in Indian soil. The transactions and activities between the appellant and Singapore principal company are the disputed activities. As such, the services are being provided by the appellant to Singapore Recipient Company and to be used by them at Singapore, may be for the purpose of the sale of their product in India, have to be held as export of service. 6.1 We find that this Bench of the Tribunal in the case of Muthoot Fincorp Ltd. Vs. Commr. of C.Ex., Visakhapatnam, 2010 (17) STR 303 (Tri. Bang) has observed that (Para 10) It can be seen from the above clarification that It is possible that export of service may take place even when all the relevant activities take place in India so l....
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....es, the receipt, consumption and delivery of the service is the same. Therefore, the condition regarding delivery of service being outside India and use of service being outside India and use of service being outside India prescribed in Rule 3(20 of Export of Services Rules, 2005 were superfluous and for this reason only, these conditions were deleted first, the condition regarding delivery of service being outside India was deleted w.e.f. 1.03.2007 and thereafter the condition regarding use of service being outside India was deleted w.e.f. 24.02.2010. These amendments, therefore, have to be treated as clarificatory amendments. Therefore, if service covered by Rule 3(1)(iii) of Export of Services Rules, 2005 i.e. service in relation to business or commerce, has been provided by a person in India to a company located abroad, not having any branch or establishment in India, for use in its business, the service provided in India shall be treated as export, if the payment has been received in convertible foreign exchange. The performance of such service in India, would not make them received/consumed in India, if beneficiary user/recipient of said service provided in relation to busine....
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....ut a portion of the export proceeds received by the exporter, though paid to the appellants in Indian Rupees. It is to be considered as receipt in foreign exchange only albeit is an indirect fashion. 7.1 We find that the Tribunal in National Engineering India Ltd. Vs. Commr. of C.Ex. Jaipur, 2009 (15) STR 68 (Tri. Del.) has observed that (Para 5) the service provided by the appellant to GMC is taxable under Section 65(105) (zzb) of the Finance Act, 1994 and this service is covered by sub-rule 93) of Rule 3, as there is no dispute about the fact that it has been provided in relation to the business of the recipient, located outside India. The Department's contention is that since the payment for the service has been received in India currency from Railways, in view of the proviso to sub-rule (3), this cannot be treated as service export. However, the proviso is applicable only if the service recipients have any commercial or industrial establishment or any office relating thereto, in India, and only in such a situation conditions enumerated mentioned in clauses (a), (b) and (c) have to be satisfied. In this case, it is not the case of the Department that GMC, USA have any offi....
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....y virtue of their brand image and reputation. It is the appellants who render the services directly to the recipients situated abroad. The payment is also rendered only in foreign exchange though by their agent, viz Satyam (India). This is evident from the plethora of record submitted by the appellant. Hence, even if it is assumed that right from the beginning, there was a requirement for getting the payment in foreign exchange, we would hold that the appellant would be satisfying such a condition also by a liberal interpretation of the notification. Alternatively, what is received by the agent Satyam in foreign exchange would be deemed to have been received by the appellant for the purposes of EOSR. 7.3 In view of the above, it is very clear that the amounts received by the appellants as commission required to be treated as to have been received in freely convertible foreign exchange. 8. The appellants contended that in respect of Appeal No. ST/185/2010 for the period 09.07.2004 to 31.03.2007 that demand was time-barred as the appellants obtained registration or payment of Service Tax in 2004 itself and intimated to the Department vide letter dated 03.12.2004 that their service....