TaxTMI 
TaxTMI 
2025 (6) TMI 182
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....unt collected towards customs clearance and unstuffing is consolidated and billed as shipping and clearance charges and no service tax was paid on the ground that the said amount is cost of reimbursement. It was alleged that the amount received is includable in the taxable value and liable to discharge service tax under 'Mailing and Compilation Service' during the period April 2005 to March 2010; the total service tax payable was worked out to Rs.29,60,509/-. Further, it is alleged that even though in their books of accounts, the appellant have been showing earnings in foreign currency towards export of international mail and other services; however, they could not produce proof of foreign inward remittance certificate, bank realisation certificate, thus as per the provisions of Rule 3(1)(b) of Export of Service Rules, 2005, the requisite conditions as prescribed under the said Rules being not satisfied, the appellant was required to pay service tax of Rs.2,85,72,898/ on the said services rendered for the period from April 2005 to March 2010; also on scrutiny of their ST-3 returns and balance sheet, it is noticed that there has been short payment of service tax amounting to Rs.10,6....
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.... required to pay appropriate service charges to the appellant for rendering such services. Also the appellant was liable to be reimbursed all the out of pocket expenses and statutory dues which was incurred by the appellant. Accordingly, the appellant raised invoices on RD India for provision of the said services. 3.3. The learned advocate has further submitted that previously a show-cause notice was issued to them on 23.10.2008 demanding service tax of Rs.14,94,705/- with interest and penalty alleging that the appellant had short paid service tax during the period May 2007 and July 2007. On adjudication, the demand was confirmed to the extent of Rs.7,47,656/- vide Order dated 19.10.2009 and finally had reached the CESTAT and by Order dated 22.06.2012, it was set aside and remanded to the adjudicating authority for de novo adjudication which later was adjudicated and the proceeding was dropped. 3.4. The learned advocate has submitted that the appellant had provided international mailing service to QS whereunder the appellant distributed mails received from the said overseas company to addressees located in India on their behalf. It is his argument that the said services do not sa....
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.... contention of the Department that their case is covered under proviso to Rule 3(3) of the said Rules, it is submitted that the appellant is a separate and distinct entity incorporated under Companies Act in India, whereas QS is a separate legal entity incorporated under the laws of Singapore. Therefore, the appellant cannot be construed as an office of QS in India. Further, referring to the amendment brought to the said Export of Service Rules, 2005 w.e.f. 19.04.2006, they have submitted that the condition prescribed under Rule 3(1) and 3(2) are entirely different set of conditions and it is nowhere prescribed that the conditions under Rule 3(1) and Rule 3(2) must be cumulatively satisfied to qualify export of service; therefore as long as a person satisfies any of the conditions provided under Rule 3(1) or Rule 3(2), such services would qualify as an export of service. There is no necessity to comply with both the clauses under Rule 3 of the said Rules. It is their contention that only w.e.f. 01.03.2007, both the rules had been linked by amendment through Notification No.2/2007-ST dated 01.03.2007. In support, they referred to the judgment of the Tribunal in the cases of Nipuna S....
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....7. 3.8. Further, the learned advocate has submitted that the demand has been confirmed under the category of 'Mailing List Compilation and Mailing Service' from the amount shown in the balance sheet wherein the Department has adopted the entire value even though some amount includes various other heads; hence the computation of demand is incorrect. Further, they have submitted that even though learned Commissioner acknowledged that the appellant had submitted FIRC dated 27.03.2007 amounting to Rs.22,74,645/-, but the said service tax demand to that extent has not been reduced. 3.9. On the issue of reimbursements received from RD India, the learned advocate has submitted that the appellant has received various amounts from RD India towards customs clearance expenditure, out of pocket expenses and other charges as reimbursements which were not included in the gross taxable value for determination of tax liability. He has submitted that it is settled position of law that there is no service tax payable on reimbursements prior to 14.05.2015. In support, they have referred to the judgment in the case of UOI Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. [2018(10) GSTL 401 ....
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.... submitted that the appellant had received Rs.2,85,72,898/- and claimed as reimbursement of expenditure incurred; hence, service tax not discharged also rejected by the Commissioner since the appellant could not establish that they being a Pure Agent and satisfied all the conditions mentioned under Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006. In support, he has referred to the judgment of the Tribunal in the cases of Sri Bhagavathy Traders Vs. CCE, Cochin [2011(8) TMI 430 - CESTAT, Bangalore-LB] and Sercon India Pvt. Ltd. Vs. CST, Delhi [2018(14) GSTL 375 (Tri. Del.)]. 5. Heard both sides and perused the records. 6. The issues involved in the present appeal for determination are whether: (i) the amount received towards distribution of mail received from their group company to the addressees in India would fall under the taxable category of 'Mailing List Compilation and Mailing Service' as defined under Section 65(63a) of the Finance Act, 1994 for the period from 01.04.2005 to 31.03.2010; (ii) service tax of Rs.29,60,509/- is payable on reimbursable expenses for the period 01.04.2005 to 31.03.2010; (iii) service tax short-paid amounting to Rs.10,60,195/....
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....nder the scope of mailing list compilation and mailing services, mere segregation of the documents at the airport and dispatching / delivering the same to the addressees in India would not come within the scope of the said definition as the service provider in addition to sending the documents on behalf of the client would also be required to do a host of activities like stuffing, sealing etc. In other words, on receiving the blank packets in the event a person carries out the activity of addressing, stuffing, metering or mailing for and on behalf of the client, then only it would fall under the scope of Mailing List Compilation and Mailing Service. Thus, mere segregating and delivering documents to the addresses already affixed on the packages, in our view, cannot be considered to fall within the scope of the 'Mailing List Compilation and Mailing Service'. The learned Commissioner while confirming the demand under the taxable category of Mailing List Compilation and Mailing Service also reasoned that the services provided by the appellant is a commercial service; hence, would fall within the scope of the said definition being the service rendered to a client, which is in the natur....