TaxTMI 
TaxTMI 
TaxTMI 
2026 (2) TMI 400
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....usive sales representative in the territory of Northern America. The scope of work included market research, procuring RFQs from potential customers, making presentation, establishing price and other commercial negotiations for finalization of orders, and providing sales and after sales services to the customers on behalf of the appellant. However, the appellant was not satisfied with the services provided by the overseas commission agent. Hence the app and stop the services and stopped making payments of commission to the overseas commission agent and merely made provision for such amount as payable in its books of account during the relevant period. The overseas commission agent had raised two invoices dated 7.5.2012. An audit was conducted by the revenue department and several objections were raised, one of which related to non-payment of service tax on the commission paid to the overseas agent. Vide order in original dated 3.11.2017, the demand was confirmed along with penalty. The Commissioner Appeals vide an order dated 24.7.2019 remanded the matter to the lower authority. Thereafter, the Additional Commissioner vide order dated 05.10.2020 confirmed the demand of service tax ....
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....(42) S.T.R. 918 (Tri.Mumbai)] (iii) Goodyear India Limited v. Commissioner of Central Excise and Service Tax, Delhi [Final Order No. 60614-60617/2025 in Service Tax Appeal No. 382 of 2012, CESTAT Chandigarh] (iv) Eastman Impex v. Commissioner of Central Excise and Service Tax, Ludhiana, Punjab [Final Order No. 61686 of 2025 in Service Tax Appeal No.50378 of 2015, CESTAT Chandigarh] 3.2 Learned counsel also contended that post July 2012, the definition of 'services' was inserted under Section 65B(44) of the Act, which covered the services provided by overseas commission agents within its ambit. However, the provisions of Section 64(1), providing that Service Tax is applicable on services provided in India, except for Jammu and Kashmir remain unchanged. Section 65B(52) provided the definition of "taxable territory" to mean the territory to which the provisions of the Chapter shall apply. Further, Section 66A of the Act was omitted with effect from 01.07.2012, however, the essence of the same was incorporated in the Reverse Charge Mechanism [RCM] Notification issued in terms of Section 68(2) to deal with the liability to pay Service Tax under reverse charg....
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....S.C.)] (ii) CCE, Bhubaneswar-l v. Champdany Industries Ltd. [2009 (241) E.L.T. 481 (S.C.)] 3.5 Learned counsel further contended the levy of Service Tax arises only when the provision of service is against a consideration and in the absence of consideration, there is no provision of taxable, service. In this regard, he submitted that Section 67 of the Act provides for valuation of services for the purposes of levying Service tax. As per Section 67(1), the value of any taxable service shall be the gross amount charged by the service provider for such service provided. Explanation (a)(i) provides that consideration includes any amount that is payable for the taxable service provided. Thus, only that amount which pertains to provision of the service and charged by the service provider, is liable to be included as consideration in the value of taxable service. In this regard, he relied on the decision in Bhayana Builders (P) Limited v. Commissioner of Service Tax, Delhi [2013 (32) S.T.R. 49 (Tri. - LB)] wherein the following was held: "12. The word 'use' therefore has multiple connotation and bears different meanings depending upon the context. The word used is the....
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....he fact that the appellant has supplied all the information at the time of audit, and no suppression has been established by the Department. 4. Learned Authorized Representative reiterated the findings given in the Order-in-Original and Order-in-Appeal. He submitted that services rendered by the foreign agents for promoting their sales is covered under the ambit of service tax net in terms of provisions of section 65(19) of the Finance Act, 1994 prior to 01.07.2012. As the service provider fell in the non taxable territory, having no office in India, the liability to pay service is on the appellant in terms of Rule 2(d) (iv) of the Service Tax Rules, 1994 read with section 66A of the Act. Learned authorized representative contended that even if the payment had not been made, the service had either been provided or agreed to be provided, hence the tax liability arose. 5. We have heard the learned Counsel for the appellant and the learned authorized representative for the department and perused the records. The issue before us is whether the demand of tax on the provision made in the book of accounts on commission payable to overseas agents but not paid is correct. 6. Before....
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....hority has failed to take note of the destination of the goods manufactured by the appellant and has deemed the services rendered in Ukraine to have been imported into India for business and commerce. From our examination of the scheme of 'deeming of import of services' for taxation supra, it can be reasonably inferred that the 'business or commerce in Rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 is not intended tax services that are rendered in connection with business or commerce outside the territory of India. Since the appellant has no requirement of advertising agency service 'for manufacture and export of goods, the tax demanded in the impugned order is not on the consideration for a service received in India but a tax on the funds transferred in a cross-border transaction. Such a tax is not contemplated in Finance Act, 1994. The demand of tax on the appellant is not in accordance with law. 20. The impugned order is, therefore, set aside." 7.2 In the instant case, we note that the services were clearly received in North America, and hence is not liable to service tax. 8. 1.7.2012-30.9.2014- ....