AI Drafter 
TaxTMI 
TaxTMI 
2024 (11) TMI 1134
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....e & Servicing, Kolkata, (hereinafter referred to as the 'Appellant') are engaged in providing taxable services, including services under the category of 'business auxiliary service' to their clients located in the United Kingdom (U.K.). In the instant case, the Appellant has been rendering the service to M/s. J.S. Humidifiers PLC located in the U.K., who have no establishment in India. The Appellant rendered the service of collecting necessary information based on the questionnaire sent by M/s. J.S. Humidifiers PLC, U.K. and supplying back such information directly to the foreign party in the U.K. 2.1. M/s. J.S. Humidifiers PLC in the U.K., short lists the probable customers from such information supplied by the Appellant. After proper s....
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....ax on the 'Commission' received by them from their principals in the U.K., a Show Cause Notice dated 19.04.2012 was issued to them inter alia demanding Service Tax for the period from 2006-07 to 2010-11. 3.3. The said Notice was adjudicated by the ld. adjudicating authority vide the Order-in-Original No. 12/JC/ST/Kol/2013-14 dated 30.09.2013 wherein the demand of Service Tax of Rs.11,12,731/-was confirmed, along with interest. Penalty equal to an amount tax confirmed in the impugned order was also imposed under Section 78 of the Act. The demand of Rs.3,49,798/- raised in the Notice was dropped. 3.4. On appeal, the Ld. Commissioner (Appeals) vide the impugned order upheld the confirmation of the demand of Service Tax of Rs.11,12,731/- ....
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....e goods by the Indian customer; the information gathered by them and provided to the principal viz. M/s. J.S. Humidifiers PLC, U.K., has been utilized by them principal located in a foreign country and thus the benefit of the information gathered by the them accrues only to the foreign principal. Thus, the appellant contended that in terms of Circular No. 111/05/2009-S.T. dated 24.02.2009, the services rendered by them would be appropriately classifiable as 'export of service'. Accordingly, the Appellant submits that the services rendered by them to the foreign principal viz. M/s. J.S. Humidifiers PLC, U.K. are not liable to Service Tax under the category of 'business auxiliary service'. 5.2. The Appellant further submits that the Depart....
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....d fall within the ambit of 'export of service' in terms of the Export of Services Rules, 2005. The Appellant has referred to the Circular No. 111/05/2009-S.T. dated 24.02.2009, wherein the phrase "used outside India" has been interpreted to mean that the benefit of the service should accrue outside India. In the present case, the principals are not having any establishment in India and the services are used by them outside India. Accordingly, the appellant has contended before us that the said activity falls within the ambit of 'export of services'. 8.1. We observe that the impugned order has relied upon the Circular No. 141/10/2011-TRU dated 13.05.2011 to interpret the words "used outside India". We observe that the demand in this case ....
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....r and not the place of performance. The relevant portion of the said Circular is reproduced below: - "3. ... For the services that fall under Category III [Rule 3(1)(iii)], the relevant factor is the location of the service receiver and not the place of performance. In this context, the phrase 'used outside India' is to be interpreted to mean that the benefit of the service should accrue outside India. Thus, for Category III services [Rule 3(1)(iii)], it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside India." 8.4. From the Circular reproduced above, we observe that the said Circular has interpreted the ph....