TaxTMI 
TaxTMI 
2019 (2) TMI 1110
X X X X Extracts X X X X
X X X X Extracts X X X X
....t is also registered with the Service Tax department under the category of "Transport of Goods by Road Services" and "Business Auxiliary Services". 2. For the purposes of exports and to procure the export order the appellant has established four fully owned subsidiaries in foreign countries. The said subsidiaries of the appellant are working as over-seas commission agents and are procuring export orders for the appellant. Inasmuch as the appellant is availing the said commission agent services from the companies located outside India, they are liable to pay Service Tax in respect of the commission paid to them, on reverse charge basis, in terms of Clause (iv) of Rule 2(1)(d) of Service Tax Rules, 1994. 3. However, Notification No.18/2009-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mmission agent; and (ii)a copy of the agreement or contract entered into between the commission agent located outside India and the exporter in relation to sale of export goods, outside India: The dispute relates to condition 3 of the Notification, which is to the effect that such exemption shall not be available on the export of the goods if export is made by an Indian partner in a company with equity participation in a overseas joint venture or wholly owned subsidiary. The Revenue has interpreted the said condition to the effect that inasmuch as the overseas commission agents were subsidiary companies of the exporters and the commission paid by them is to its wholly owned subsidiaries in respect of the export orders, the services are no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eign buyers and there is no allegation that the export was between the appellant and its wholly owned subsidiaries. The services of the appellant's subsidiaries in a foreign company were procured only for getting the export orders from other independent persons located in foreign country. They have paid only commission to their foreign based wholly owned subsidiaries in which case they would be entitled to the benefit of the Notification in question. He submits that condition 3 of the Notification denies the exemption only when export is made by a Indian partner to a overseas joint venture or wholly owned subsidiaries. The interpretation given by the adjudicating authority that even if the export orders are procured through the wholly owned....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ority and submits that condition No.3 debars applicability of exemption if the exports are made by a Indian partner in a company with equity participation in a overseas joint ventures or wholly owned subsidiaries. He submits that inasmuch as the foreign commission agents are the appellant's fully owned subsidiaries, the benefit of the Notification in question cannot be extended inasmuch as the same is hit by the said condition. As such he prays for upholding the impugned orders. 7. After carefully considering the submissions made by both the sides and after going through the impugned order, we find that the phrase contained in condition 3 of para 2 of the Notification, which already stands reproduced by us, required to be interpreted in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble to ignore or introduce any word in the language of the Notification. On reading the said clause of the condition of the Notification, it is seen that there is no reference therein to the orders procured by the wholly owned subsidiaries, acting as commission agents, from a foreign land. Admittedly in the present case the appellant has not exported the goods to its own wholly owned subsidiaries or overseas joint ventures. The appellant has paid only commission to its foreign based commission agents, who happened to be their own subsidiary company and has not made any exports to them. We find that the legislative intent beyond the introduction of the above condition is that no exporter would take undue advantage of the exemption on overse....