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2023 (3) TMI 577
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....of the Finance Act, 1994 [the Finance Act] for the period 2014-2015. The demand proposed in the said statement has been confirmed with penalty and interest. 2. The said statement of demand had been issued, as earlier three show cause notices dated 17.04.2013, 22.05.2014 and 20.04.2015 for the period 2009-2010 to 2013-2014 were issued. The issues raised in the said show cause notices are as follows:- a. Non-payment of service tax on advertisement expenses incurred by the local franchisees on behalf of the appellant. b. Short payment of service tax due to wrong utilization of cenvat credit. c. Non-payment of service tax on 'management consultancy' services by wrongly claiming the same as 'export service'. ....
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.... directly or indirectly, from the franchisees, except the said royalty amount and the location fee amount. It is not in dispute that service tax has been paid by the appellant on the said royalty and the location fee amount. The appellant is also providing 'management consultancy' services to McDonald's USA, in terms of a Service Agreement dated 1 April, 1999. 6. Till 27 February, 2010, appropriate service tax on the income earned by the appellant was discharged. With effect from 27 February, 2010, when an amendment was made in the erstwhile 'Export of Services Rules, 2005 [the Export Rules] by a Notification dated 27 February, 2010, such services were treated as exports. Similarly, with the introduction of the 'Place of ....
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.... (b) payment for such service is received by the service provider in convertible foreign exchange." 61. Rule 3(2) of the Export of Service Rules 2005 states that provision of any taxable service to qualify as export has to satisfy the condition that payment for such services is received in convertible foreign exchange. 62. While examining the reply of the appellant, the Principal Commissioner has relied upon the requirement contained under the Reserve Bank of India Regulations that require the export proceeds to be realized within a period of one year from the date of export of services. 63. In the first instance, there is no time limit in Rule 3(2) of the Export Service Rules, 2005. Thus, any time limit pres....