TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 12
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....ervice provider and is liable to pay the service tax applicable under Reverse Charge Mechanism. The appellants have paid commission of Rs.1,33,95,351/- to the foreign commission agents during the period from 09.07.2004 to 28.02.2009 but have failed to discharge their service tax liability of Rs.15,55,773/-. 1.2 As such, the appellant was issued with a Show Cause Notice No. 33/2009-ADC dated 30.09.2009 for the period from 09.07.2004 to 28.02.2009 by invoking the extending period of limitation proposing to levy service tax and cess for Rs.15,55,773/- under the category of BAS for the commission paid to overseas commission agents along with interest and penalty under Section 76, 77 and 78 of the Finance Act, 1994. The above service tax was demanded from the appellant under reverse charge mechanism as the overseas commission agents were located abroad who procured export orders for the appellants. 1.3 After the due process of the adjudication, the Adjudicating Authority vide Order-in-Original No. 36/2014 (ST-ADC) dated 25.03.2014 confirmed the levy of service tax for the period from 18.04.2006 to 28.02.2009 to an extent of Rs.10,96,489/- along with interest and penalty under Section ....
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.... service tax was dropped for the period prior to 18.04.2006 as Section 66A came into force from the said date, in pursuance to the decision of the High Court of Bombay in the case Indian National Shipowners Association [(2009) 13 STR 235]. Penalty under Section 76 was dropped as penalty under Section 78 of the Finance Act, 1994 was confirmed. 1.4 Aggrieved by the order of the Adjudicating Authority to the extent that the demand was confirmed, the Appellant filed an Appeal against the order on the following grounds: - i. The Show Cause Notice is not signed; hence it is not valid. Therefore, the proceeding is void ab-initio. ii. The Show Cause Notice has not invoked the provisions of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. iii. The activity was carried out outside India and Section 64 which is the parent section is applicable only in India except Jammu and Kashmir. iv. In terms of Rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, services are taxable only if the services are received in India by the service recipient whereas in the present case, the activity namely, canvassing or....
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....none of the ingredients that are required for invoking the extended period of 5 years are present. All details have been taken from the Appellants books of accounts and there suppression is not attributable to the conduct of the Appelant. 3. The Ld. Authorised Representative Shri N. Satyanarayanan for the Department has reiterated the findings of the Lower Adjudicating Authorities. He has submitted that the services provided by a foreign commission agent or a non-resident from outside India and received by a person in India are taxable under BAS and the liability to pay tax was envisaged on the recipient of such service under Rule 2(1)(d)(iv) of the Service Tax Rules, 1994 read with Section 66A of the Finance Act, 1994. He has referred to the Board's Letter vide F.No. 276/8/2009-CX 8A dated 26.09.2011, wherein a clarification was issued to the effect that service tax liability falls upon the recipient of service in India where any taxable service was provided by the non-resident or a person located outside India w.e.f. 18.04.2006. The fact of receiving export orders from a foreign agency is nothing but a kind of service carried out on behalf of the appellants by a person or an age....
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....the confirmed orders from overseas buyers, they procure yarn, dyes/chemicals and other raw materials for the manufacture of textile made ups. The entire activity is predominantly known as textile processing. Since their entire activity is dependent upon export orders, without securing the confirmed overseas orders, they cannot undertake manufacture of Textile made ups as quantity, design and specification of export goods is to be met as per overseas buyers requirement. He further submits that overseas commission agent service have direct nexus with the manufacturing and textile processing of finished goods and the commission paid to the overseas buyers is an input service as they are engaged in the textile processing. During the material period, the Notification No. 14/2004-S.T., dated 10-9-2004 exempts taxable service provided to a client in relation to Business Auxiliary Service, Agriculture, Printing, Textile Processing Industry. The lower appellate authority had denied the exemption. As they are the textile manufacturer and exporters, the exemption under the above notification is not applicable to them. He further submits that as per Foreign Trade Policy Notifications for the P....
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.....T., dated 10-9-2004 and whether assessees are liable for penalty as contended by Revenue. Prima facie, we find that there is no dispute on the fact that the appellants are manufacturer-exporters and they manufacture textile made ups and export to overseas. They have engaged overseas agents and paid commission for procurement of export orders and the commission agency service is covered under the Business Auxiliary Service. The appellants claimed the exemption under Notification No. 14/2004-S.T., dated 10-9-2004 as applicable during the relevant period before appellate authority and he rejected their plea on the ground that the said exemption is applicable to the input services related to textile processing. The period involved in all these appeals relates to post 18-4-2006. It is relevant to reproduce the Notification No. 14/2004-S.T., dated 10-9-2004 as under :- "Service tax exemption to specified services in relation to Business auxiliary service In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable service....