TaxTMI 
TaxTMI 
2025 (6) TMI 1808
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....entral Excise(Appeals), Mangalore. 2. Briefly stated the facts of the case are that the appellant are engaged in the business of providing various services in connection with purchase and sale of sea foods to their clients. The appellant was issued with two show-cause notices dated, one on 19.08.2008 proposing recovery of service tax of Rs.52,68,133/- for the period 09.07.2004 till 30.09.2007 and second one on 15.04.2009 for recovery of service tax of Rs.16,186/- for the period October 2007 to March 2008 alleging that even though the appellant rendered Business Auxiliary Service in relation to promotion or marketing or sale of goods and the commission received thereof not subjected to service tax; hence amount mentioned in the notices pr....
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....ained by the overseas buyer / foreign principal in the name of the appellant. The appellant transfers Letter of Credit to the exporters by giving instructions to the bank and the exporter. The Letter of Credit includes the commission of the appellant. The sea foods exported by the Indian exporter against the purchase order and foreign exchange is realised on such exports. A part of the foreign exchange attributable to the appellant as commission had been transferred to the appellant in Indian rupees. In certain cases, the consideration was directly remitted to the appellant by the foreign principal in convertible foreign exchange. He has submitted that the issue thus falls for consideration is whether the service rendered by the appellant w....
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....ant then transfer the Letter of Credit to the exporters with an instruction to the bank and the exporters that the amount of Letter of Credit includes the commission of the appellant. After the export, the exporter transfers the commission to the appellant in Indian rupee. In some cases, the foreign buyer remits the commission to appellants in freely convertible foreign exchange. In these circumstances, this Tribunal observed as follows:- 6. In the case of Microsoft Corporation (India) Pvt. Ltd. Vs. Commr. of ST., New Delhi, 2017 (36) STR 766 (Tri. Del.) 2014-TIOL-1964- CESTAT-DEL as observed as follows : (Para 48) Without going into the detailed facts involved and the detailed submissions made by both the sides, I find th....
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....1) Even otherwise also, I find that the disputed service is the service being provided by the appellant to his principal located in Singapore. The marketing operations done by the appellant in India cannot be said to be at the behest of any Indian customer. The service being provided may or may not result in any sales of the product in Indian soil. The transactions and activities between the appellant and Singapore principal company are the disputed activities. As such, the services are being provided by the appellant to Singapore Recipient Company and to be used by them at Singapore, may be for the purpose of the sale of their product in India, have to be held as export of services. 6.1 We find that this Bench of the Tribunal in t....
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..... We mentioned that there was some change in sub-rule (3) but that change is not relevant for us. Thus, it can be seen the Government has deliberately not amended Rule 3(3) while amending Rule 3(2) and 3(1) providing fore receipt of payment in convertible foreign exchange to deem the services relating to said rule as export of service. The conclusion is that Notification 28/2005-ST, dated 07.06.2005 has not changed the position with regard to the services rendered by the appellant from what was obtaining in terms of Notification No. 9/2005-ST dated 03.03.2005". (Para 12) Accordingly, we are of the considered view that services rendered by the appellant cannot be taxed under the category of 'Business Auxiliary Services'. ....
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....vice provided in India shall be treated as export, if the payment has been received in convertible foreign exchange. The performance of such service in India, would not make them received/consumed in India, if beneficiary user/recipient of said service provided in relation to business or commerce, who has paid for these services and has used the service, also has some branch/project in India and the service provided in India is meant for that branch/project- only in that case, the consumption of service would be taxable in India. But if the recipient company located abroad, has no branch or project or establishment in India and the service covered by Rule 3(1)(iii) provided in India is meant for use in the business of the company located ab....