TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 222
X X X X Extracts X X X X
X X X X Extracts X X X X
.... had received taxable services of Commission Agent under Business Auxiliary Service from service provider based outside India during the year 2006-07 to 2009-10 and had paid the commission to the service provider in foreign currency for the services received. Accordingly, appellant was issued show cause notice dated 02.09.2011 proposing service tax demand of Rs. 45,94,496/- on 'Business Auxiliary Services' along with interest and penalties. In adjudication, the adjudicating authority vide order-in-original dated 28.03.2011 confirmed the demand along with interest, imposed penalty under Section 78; penalty under section 76; section 77(1)(a); penalty of Rs. 5000/- was imposed under Section 77(2) of the Finance Act 1944, and also a late fees of Rs. 2000 under Rule 7C of the Service tax Rules, 1994 . The appeal against the said Order-in-Original was filed by the Appellant which has been rejected vide impugned Order-In-Appeal dated 03.01.2014. Hence the present appeal. 3. Shri Ansal Jain Learned Advocate appearing for the appellant submits that the foreign subsidiary company of Appellant is not providing Business Auxiliary Services to the appellant. Subsidiary company of the appellant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e appellant. Thus the activity undertaken by the appellant will not be classified under the commission agent or business auxiliary services. 7. He placed reliance on the following judgment in support of argument:- (i) CCE, Bangalore vs. Mahaveer Genrics -2010(17)STR 225 (Kar.) (ii) Larsen and Toubro Ltd. Vs. CCE, Chennai -2006(3) STR (Tri. LB) (iii) CCE Jalandhar Vs. United Plastics - 2008(10) STR 229 (P&H) 8. Without prejudice, he also submits that 'clearing and forwarding' service fall under Rule 3(ii) of the Taxation of Services (Provided from outside India and Received In India) Rules, 2006. In the present case the entire activity of the clearing and forwarding is performed outside India. Therefore the activity undertaken by subsidiary company does not qualify as import of service by appellant and therefore is not liable to service tax in India. Thus, appellant are not liable to pay service tax under the category of 'Business Auxiliary Service'. 9. He also argued that the nomenclature of the consideration or the payment terms alone cannot decide the nature of the services provided which is a trite law. The contention of the revenue that the appellant have paid the comm....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... are chargeable to Service tax. 13. We find that appellant are engaged in the business of export of educational books. The Appellant purchase the books from the publisher in India and export the same as per the requirement of their customers abroad. The Appellant had entered into a consignment agreement dated 01.01.2014 with its subsidiary the relevant clause of the said agreement provide as under: a. Clause 1 of the said agreement provides the information about the parties to the agreement. It described the Appellant as sellers and subsidiary as Buyer. b. Clause 2 of the said agreement provides for payment of instruments and terms. Clause 2.1 provides that books sold/shipped to Subsidiary company are on consignment basis. Should the books remain unsold at the end of 360 days from the date of invoice they may be disposed abandon basis. Clause 2.2 provides that Subsidiary company i.e Edge Exim Inc. will retain 15% commission of the ultimate sale price of the third parties for each shipment or part thereof and bank transfer the remaining 85% proceeds to its Indian Parent Company, Enbee Education Centre Pvt. Ltd. within 360 days of the invoice date. Clause 3 provides for port....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ness Auxiliary Service under reverse charge mechanism. However, we observe that definition of 'Business Auxiliary Services' contained numerous sub-heads and it was necessary for Revenue to point out under which head of the said definition the demand was raised. It is important to classify the activity under the specific sub-clause before confirming the demand. We find that the same has not been done in the present matter. In the absence of the specification of the exact sub-clause under which the demand was raised the said demand cannot be sustained. In this regard judgment in the case of United Telecoms Ltd. v. Commissioner of Service Tax - 2011 (22) S.T.R. 571 (supra), Sharma Travels - 2017 (52) S.T.R. 272 (supra) and Balaji Enterprises v. C.Cx. & S.T. - 2020 (33) G.S.T.L. 97 (Tri. - Del.) (supra) support their case. The said decisions are squarely applicable to the facts of the present case. 15. We find that department alleged that appellant are receiving the services of 'Commission Agent' from subsidiary Company. Whereas as per the appellant subsidiary company is acting as consignment cum clearing and forwarding agent. However there is difference between the terms 'consignment....