TaxTMI 
TaxTMI 
2023 (2) TMI 894
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....ce tax not paid on overriding commission received by the appellants apart from demand of the interest and imposition of penalty. 2. The appellant during the disputed period was functioning as General Sales Agent of M/s. Travel Pie LLC, Arizona (Alaska Airlines), USA. The appellant has received overriding commission for the services provided to M/s. Travel Pie LLC, Arizona. The appellants have submitted that in terms of Rule 3 (3) of Export of Service Rules, 2005, (ESR, 2005 in short) in relation to business auxiliary services, services will be construed as export when such services are provided and used in or in relation to commerce or industry and the recipient of such service is located outside India. Rule 3 (3) of ESR, 2005 reads as follows:- "3. Export of taxable service. - (i) ..................... (ii)..................... (iii) specified in clause (105) of section 65 of the Act, but excluding'- (a) sub-clauses (zzzo) and (zzzv); (b) those specified in clause (i) of this rule except when the provision of taxable services specified in sub-clauses (d), (zzzc), (zzzr) and (zzzzm) does not relate to immovable property; and (c) those specified in clause (ii) of this....
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....dered as export of service to be that such services provided and used in or in relation to commerce and industry and recipient of such services located outside India - Services provided definitely in relation to commerce and services provided on agreement signed with client Saudi Arabian Airlines Corporation, Jeddah, Saudi Arabia - Thus first two conditionalities satisfied - Commercial services provided inter alia, soliciting, promoting and selling passenger air transportation and cargo and mail transportation for Saudia very much Business Auxiliary Service, to benefit all such service flowing to Saudia's business - Although assessee's activities taking place in India, benefit in terms of business of foreign company accruing outside India - Therefore impugned service satisfying particular requirement in impugned Rule 3(3) ibid - Since outflow of foreign exchange reduced to extent of commission/payment retained within India, such retention to be necessarily treated as saving of foreign exchange and by implication akin to receipt of monies in convertible foreign exchange - Conditionalities of Rule 3(3) ibid as amended and applicable during different periods involved to be deemed to h....
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.... hire charges, Insurance charges, Staff welfare expenses and Travelling expenses. During the disputed period, as per Rule 2 (1) of Cenvat Credit Rules, 2004, "input service" means any service;- "(i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal. and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; " As per Rule 3 of Cenvat Credit Rules, 2004, provider of taxable service shall be allowed to take Cenvat credit paid on any input service r....
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....they are eligible for the credit of input services as these expenses are incurred necessarily and essential for providing their output service and they were used in or in relation to the business. She has relied upon the decision of the Bombay High Court in the case of Ultra Tech Cement Ltd. reported in (2010) 20 STR 577 in this regard. 6. We have heard both sides and also perused the case records and the case laws relied upon by the appellants. 7. During the period covered in these impugned notices, denial of Cenvat credit on input services such as Car hire charges, Insurance charges, Travel expenses and Staff welfare expenses is not legally maintainable in terms of Rule 2 (1) of CCR, 2004, as all these services are input services considering the sweep and depth of definition of input service as per Rule 2 (1) of CCR, 2004. It includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, activities relating to business etc. This being an inclusive definition of an 'in....