TaxTMI 
TaxTMI 
2024 (1) TMI 526
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....ny viz. M/s.JPS Trading is based in Dubai and is a sourcing and quality monitoring agent of goods shipped to M/s.Bonprix, Germany. M/s.Fashion Force, Tirupur, is the Indian office of M/s.JPS Trading Company, Dubai. The appellant is one of the suppliers of goods to M/s.Bonprix, Germany through M/s.JPS Trading, Dubai. The appellant receives payments from their overseas buyer through M/s.JPS Trading after the deductions of bonus, inspection charges and recycling compensation by the buyer. The department was of the view that the above mentioned deductions are paid by the exporter for the furtherance of their business which is classifiable under the head "Business Auxiliary Service" and "Technical Inspection and Certification Services" and is ta....
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....erest and penalties imposed. Hence this appeal. 2. The Learned Counsel Sri M.N. Bharathi appeared and argued for the appellant. Ld. Counsel adverted to the invoice raised by the appellant on M/s.Bonprix, Germany and submitted that the deductions are shown in the invoice price as 'packing recycling compensation', 'bonus', 'inspection charges'. The appellant has not made any payment to M/s.JPS Trading, Dubai or their unit in India viz. M/s.Fashion Force, Tiruppur. The allegation in the show cause notice does not bring out as to who is the service provider. It merely states that the deductions having been made by the appellant in the invoice in the nature of inspection charges and recycling compensation, these amounts have to be considered as....
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....count given during the transaction of sale. For this reason itself, the demand raised against the appellant cannot sustain. 2.1 In regard to demand of service tax under GTA service, the learned counsel submitted that for the period after 1.3.2008 the adjudicating authority has granted abatement. However, for the period prior to 1.3.2008 the authorities below have denied to grant abatement as envisaged in Notification No.32/2004 dated 2.12.2004 for the reason that the condition in the notification applicable to goods transport agency has not been complied with by the appellant. The said condition requires that the appellant has to furnish declaration that the Goods Transport Agency has not availed cenvat credit on capital goods. This condit....
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....i to the appellant, they get paid by the appellant in the nature of bonus, recycling compensation and inspection charges. Therefore, for the services rendered by M/s.JPS Trading, Dubai through their branch office M/s.Fashion Force, Tirppur to the appellant for furtherance of business prospects, M/s.JPS Trading, Dubai gets paid by the appellant through M/s.Bonprix, Germany. Thus, the demand raised is proper. It is prayed that the appeal maybe dismissed. 4. Heard both sides. The issue to be considered is whether the appellant is liable to pay service tax under 'Business Auxiliary Service', 'Technical Inspection and Certification Service', and 'GTA Service'. 5. In regard to 'Business Auxiliary Service' and 'Technical Inspection and Certifica....
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....nism. Even if there was any service rendered in regard to quality checking, the demand ought to have been raised against M/s.Fashion Force, who is the service provider for quality checking. If the department is of the view that Fashion Force, Tiruppur is the branch office of JPS Trading, Dubai then it would be M/s.Fashion Force, Tiruppur who is liable to pay service tax. It cannot be said that the deductions made in the invoices raised in the name of M/s.Bonprix, Germany is a payment made to Fashion Force, Tiruppur. For these reasons, we find that the demand raised under 'BAS', 'Technical Inspection and Certification Service' is without any factual or legal basis and requires to be set aside which we hereby do. The issue on merits is answer....
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....indicated that the two types of goods were different in nature. The question is about the intention, namely, whether it was done with bona fide belief or there was some mala fide intentions in doing so. It is here we agree with the contention of the learned senior counsel for the appellant, in the circumstances which are explained by him and recorded above. It is stated at the cost of repetition that when the entire exercise was revenue neutral, the appellant could not have achieved any purpose to evade the duty. 8. Therefore, it was not permissible for the respondent to invoke the proviso to Section 11A (1) of the Act and apply the extended period of limitation. In view thereof, we confirm the demand insofar as it pertains to show cause ....