TaxTMI 
TaxTMI 
2024 (9) TMI 777
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....as 'the appellant') is a merchant exporter of 'leather goods'. During the course of export of their products, the appellant had spent some money in convertible foreign exchange for procurement of goods as well as for availing certain services required for the purpose of export. 2. Upon scrutiny of the Annual Financial Accounts of the appellant for the period from 01.10.2007 to 31.03.2012, the Officers of the department observed that the appellant had not paid Service Tax in respect of the expenditure made in foreign currency under Reverse Charge mechanism. The foreign currency expenditure made by the appellant has been worked out as drawn in the table given below : 2.1. On the basis of the above, the Service Tax payable by the app....
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....ble on the commission as they were eligible for the exemption in terms of Notification No.41/2017-S.T. dated 06.10.2007, as amended by Notification No. 17/2008-S.T. dated 01.04.2008; these Notifications provide exemption by way of refund. 4.2. The appellant further submits that the entire demand is barred by limitation as they have not suppressed any information from the Department and hence, extended period could not be invoked to demand service tax. Further, they also submit that the issue is revenue neutral as the service tax paid under reverse charge would be available as credit to them. In support of this claim, the appellant relied upon the following decisions: (i) Laxmi Exports Vs Commissioner of Central Excise and S.T, S....
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....it is the contention of the appellant that they have been filing their returns regularly and the Department has taken the details from their balance sheet wherein all the details of receipts have been declared by them, in Annexure-A thereto. They submit that there is no suppression of any fact with the intention to evade payment of tax established in this case. Further, it is their submission that the issue is revenue neutral as the service tax paid under reverse charge would be available as credit to them; that when the issue is revenue neutral extended period of limitation cannot be invoked. Accordingly, the appellant contended that the demand of Service Tax by invoking the extended period of limitation is not sustainable. 5. The Ld. A....
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....t of 'sales commission' by invoking the extended period of limitation is not sustainable and hence we set aside the same. 8. Regarding the demand of Service Tax in respect of sales promotion expenditure, we find that the appellant has incurred various types of expenses under this head. For the sake of ready reference, the various heads under which the foreign currency expenditure was made and shown under 'sales promotion', in the Annexure are reproduced below : - [ ref. Annexure - B to Appeal No. ST / 76017 / 2014 - DB ] 8.1. From the table reproduced above, we observe that most of the expenses are in the form of discounts / bonuses offered on account of sale and related purchase of goods. There is no evidence brought on record by ....
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....ceipt of any service, to demand Service Tax under reverse charge mechanism from the appellant. Accordingly, we hold that the demand of Service Tax under this head is not sustainable. 10. In view of the above, we hold that the demands of Service Tax confirmed in the impugned order are not sustainable and accordingly, the same are set aside. 11. Since the demands itself are not sustainable, the question of demanding interest thereon and imposing penalty does not arise. 12. In the result, we set aside the impugned order and allow the appeal filed by the appellant. ( Order pronounced in the open court on 13. 09. 2024 ) ============= Document 1 Head of expenditure 2007-08 (Rs.) (Oct'07 - March'08) 2008-09 (Rs.) 2009-10 (Rs.) 201....