TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 437
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....manufacture and sale of Zippers and parts thereof in India and to neighbouring countries. The appellant is registered with the Service Tax department and has obtained centralized registration under the Finance Act to meet compliance obligations. 2.1 An audit of the appellant was conducted by the department for the period April 2006-07 to 2010-11 under Rule 5A of the Service Tax Rules, 1994 during January, February and June, 2011. 2.2 Subsequently, based on the audit objections, the appellant was served two SCNs dated 17.10.2011 and 28.09.2012, covering the period 2006-07 to 2010-11 and 2011-12 respectively. 2.2.1 Vide first SCN, a demand of service tax of Rs.68,17,381/- along with interest and imposition of penalties under Sections 76, 77 & 78 of the Finance Act, was proposed; and a recovery of Cenvat Credit amounting to Rs.13,08,503/- along with interest and imposition of penalty under Rule 15 of Cenvat Credit Rules, was also proposed in the first SCN. 2.2.2 Vide the second SCN, a demand of service tax amounting to Rs.42,599/- along with interest and imposition of penalties under Sections 76 & 77 of the Act, was proposed. 2.3 After following the due process, the lea....
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....port of Service Rules, 2005. He further submits that for confirming the said demand, the Commissioner has relied upon the Tribunal's Interim Orders passed in cases of Microsoft Corp India Pvt Ltd vs. CST, Delhi [2009 (15) STR 680 (Tri. Delhi)] and Life Care Medical Systems vs. CST, Mumbai [2013 (29) STR 129 (Tri. Mumbai)], wherein while deciding the application for stay and waiver of pre-deposit, the Tribunal prima facie observed that 'since, the services were not delivered and used outside India and thus, the activity is not covered under the scope of export of services'. He further submits that in terms of the various commission agreements signed by the appellant with the group companies, the appellant was obligated to act as an agent of such group companies and facilitate sale of their products in India. He further submits that the appellant only procures orders from Indian customers and submits these orders to the group companies for making supply directly to the Indian customers and in that process, the appellant receives sales commission in foreign currency, which falls under Category-III, i.e., Rule 3(1)(iii) and qualifies as 'export of services' under Rule 3 of the Export o....
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....for the period 2009-10, the learned Counsel submits that this demand has been confirmed on the same line as relates to Business Auxiliary Services under Issue No.(i). He further submits that as per the agreement dated 01.04.2009 entered into by the appellant with YKK Singapore whereby the appellant was supposed to provide support services by way of advice, consultancy and technical assistance to manage its business in South Asia Region comprising of Pakistan, Bangladesh and Sri Lanka. He further submits that the beneficiary of such services is YKK Singapore located in Singapore and therefore the services were actually used outside India and thus such services qualify as 'export of service'. 4.3 As regards the Issue No.(iii), where on the value of expenses reimbursed, the Commissioner has confirmed the demand of Rs.14,39,540/- for the period 2006-07 to 2010-11 in respect of first SCN and the demand of Rs.42,599/- for the period 2011-12 in respect of second SCN. In this regard, the learned Counsel submits that the said demands have been confirmed on the allegation which is based on incorrect and misconceived sets of fact. He further submits that the expenses were not incurred by t....
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.... to bring on record any evidence to prove willful suppression, fraud etc on the part of the appellant. He further submits that when the service tax itself was not chargeable then how can suppression be alleged in the present case. For this, he relies on the following decisions: * Collector of C.E. vs. Chemphar Drugs & Liniments - 1989 (40) ELT 276 (SC) * Vasper Concepts P. Ltd vs. CCE, Bangalore - 2006 (199) ELT 711 (Tri. Bang.) * Ericsson India Pvt Ltd vs. CST, New Delhi - (2024) 24 Centax 144 (Tri. Chan.) 4.6 As regards imposition of penalty, the learned Counsel submits that penalty is not imposable when there is neither any contravention of any provision nor the extended period of limitation is invokable. 5. On the other hand, the learned Authorized Representative for the Revenue reiterates the findings of the impugned order. 6. We have considered the submissions made by both the parties and perused the material on record as well as the decisions relied upon by the appellant. 6.1 As regards Issue No.(i) relating service tax demand on Business Auxiliary Service, we find that as per the agreement entered into by the appellant with its asso....
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....ement dated 01.04.2009 entered into by the appellant with YKK Singapore to provide support services by way of advice, consultancy and technical assistance to manage its business entities in South Asia Region, we hold that the beneficiary of such services is YKK Singapore located in Singapore and therefore, the services were actually used outside India and thus the same qualify as 'export of service' under Rule 3(2) of the Export of Service Rules, 2005. 6.3 As regards Issue No.(iii) relating service tax liability on the value of expenses reimbursed, we find that this issue is also no more res integra as has been settled by the Hon'ble Delhi High Court in the case of Intercontinental Consultants & Technocrats Pvt Ltd (supra) which has further been approved by the Hon'ble Supreme Court (supra) and the said judgment of Hon'ble Delhi High Court has been followed by the Tribunal in the case of Hewlett Packard India Sales Pvt Ltd (supra). Therefore, by following the judgment of Hon'ble Delhi High, we hold that the demand of service tax on the value of expenses reimbursed is not sustainable. 6.4 As regards Issue No.(iv) relating to eligibility to avail Cenvat Credit on trading activi....