TaxTMI 
TaxTMI 
2023 (3) TMI 173
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....and other activities. 3. The appellant is a manufacturer-exporter of pharmaceutical products and is a 100% Export Oriented Units. It established representative offices in many countries to promote its goods and to liaison with the local authorities in such countries. According to the appellant, these representative offices do not have any independent revenue or clients and the purchase orders are entered with the clients directly by the appellant and so the representative offices do not enter into any contract with the clients. The payment for goods supplied to the customers is received by the appellant and all the expenses incurred in the supply of goods are claimed as expenses in India. The salaries of the employees working at the representative offices are also remitted by the appellant. The appellant also reimburses other expenses incurred by the representative offices for its operations. These expenses are in the nature of rent, security, electricity etc. 4. The department entertained a view that the expenses incurred by the appellant are liable to service tax on reverse charge basis. Earlier also, show cause notices were issued to the appellant and they were adjudicated....
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....n, learned counsel for the appellant assisted by Shri Kunal Aggarwal made the following submissions : (i) The impugned order has been passed based on obsolete provisions of law; (ii) The impugned order has recorded findings on submissions never made by the appellant and no findings have been given on the submissions made; (iii) The issue involved in the instant appeal has been decided in favour of the appellant by the Tribunal in the appellant‟s own case; (iv) The service tax demand of Rs. 25,75,99,285/- under heading „business promotion expenses‟ is liable to be set aside; (v) The service tax demand on „advertisement expenses‟ of Rs. 2,60,90,008/- is liable to be set aside; and (vi) Interest and penalties are not imposable on the appellant. 7. Shri Harshwardhan, learned authorized representative appearing for the Department, however, supported the impugned order. 8. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the Department have been considered. ORDER IS BASED ON OBSOLETE PROVISIONS 9. The first submission adv....
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....ned order is passed based on the provisions of law applicable prior to July 01, 2012. The demand would, therefore, have to be set aside in view of the decision of the Karnataka High Court in CST, Bangalore vs The Peoples Choice [2014-TIOL-431-HC-KAR-ST]. ISSUE DECIDED 10. This apart, the issue involved in this appeal has also been decided in favour of the appellant in the appellant‟s own case. On an identical issue, for period 2006-07 to June 2012, the Tribunal decided the issue in favour of the appellant by order dated January 12, 2018 passed in Service Tax Appeal No. 57891 of 2013 and Service Tax Appeal No. 51216 of 2014. For the period July 2012 to November 2013 also, the Tribunal decided the issue in favour of the appellant by order dated June 13, 2018 passed in Service Tax Appeal No. 52357 of 2015. For the period December 2013 to August 2014, the Tribunal decided the issue in favour of the appellant by order dated October 01, 2021 passed in Service Tax Appeal No. 53015 of 2016. 11. In M/s Kusum Healthcare Pvt. Ltd. vs CCE, Jaipur [S.T. Appeal No. 57891/2013 & S.T. Appeal No. 51216/2014 decided on January 12, 2018] which relates to the period from April 2006 to J....
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....4. Thus, as the issue involved has been decided in favour of the appellant in the own case of the appellant for pre-negative list and post-negative list, the demand deserves to be set aside. BUSINESS PROMOTION EXPENSES 15. The appellant claims that it made foreign currency expenditure of Rs. 25,75,99,285/- on account of business promotion activities during the relevant period from September 2014 to September 2015. The Department has treated the said amount as „taxable value‟ and raised a demand of service tax on the amount of Rs. 25,75,99,285/. The break-up of this amount is as follows : S. No. Description of Expenses Amount 1 Catalogues 2,59,75,847 2 Leaflets 80,945 3 Souvenir Products 5,00,517 4 Calendar 4,81,826 5 Tear Sheet 1,51,073 6 Polythene Bag 47,410 7 Miscellaneous Items 68,005 8 Vouchers/Coupons for purchase of materials 21,70,15,023 9 Insurance Charges 21,784 10 Space Charges 6,95,591 11 Electricity Charges for CPHI 1,21,577 12 Stand Cleaning/Designing/Installation 12,72,624 13 Foreign Trip Sponsorship Charges 1,11,67,064 Tot....