TaxTMI 
TaxTMI 
2026 (7) TMI 95
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....Y 2011-12 under Rule 14 of the CENVAT Credit Rules, 2004, along with applicable interest and equivalent penalty. Penalty of Rs. 38,600/- imposed under Section 77(1)(a) of the Finance Act, 1994." 2. The facts of the case are that M/s.Nippon Steel & Sumikin Engineering India Pvt. Ltd. ('herein after referred as the Appellant') is a wholly owned subsidiary of M/s. Nippon Steel & Sumikin Engineering Co. Limited ('NSEC Japan'), a corporation duly incorporated in Japan. 2.1. During the relevant period, the Appellant entered into various agreements with NSEC Japan on a yearly basis, which are dated 05.04.2011, 01.04.2012, 15.03.2013, 28.02.2014 and 15.12.2014, along with addendums dated 28.02.2014, for rendering Marketing and Administrative Support Services on a principal-to-principal basis. Vide the said agreements, the Appellant was required to gather information of customers, competitions, constructors, suppliers and relevant companies related to NSEC Japan and its subsidiary and other relevant companies. Such service was agreed to be delivered by the Appellant to NSEC Japan, or its subsidiary companies, outside India, for use by such companies, outside India, for their business ....
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....nd that the assessee have not paid service tax for providing 'Business Auxiliary Service' to their counterpart in a foreign country, i.e., M/s Nippon Steel & Sumikin Engineering Co. Ltd., Japan..." whereas it is alleged that the Appellant has not provided services to a recipient located outside India. The Appellant submitted that on a perusal of the agreements executed by them with NSEC Japan, it would clearly show that the Marketing and Administrative Support services are provided by the Appellant to NSEC Japan, which is a company located outside India. The Department has also not disputed the same, as evident from para 2.1.0 of the underlying SCN. The Appellant submits that the entire proceedings have been initiated, for the reason that as per the scope of the agreements, the Appellant carries out the gathering of information of customers, competitors, suppliers, and providing administrative support etc., to NSEC Japan, in India. In this regard, the Appellant submitted that the place of performance of contract has no relation whatsoever in determining the recipient of services. It is a settled position of law that the recipient is determined basis the person who is responsible....
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....of gathering information of customers, competitors, constructors, suppliers, relevant companies related to NSEC Japan and its subsidiary companies or other related organizations. Further, the Appellant also has to provide administrative support and communication coordination between the NSEC Japan and its Indian customers. 4.1. Since the demand covers both the positive list and negative list regime, it is pertinent to refer to the provisions of both the positive list and negative list regime. During the positive list regime, the provisions concerning export of service were contained in Export of Service Rules 2005. As per Rule 3(1)(iii) of the Export of Service Rules, which was applicable to the Business Auxiliary Services and Business Support services being rendered by the Appellant, export of taxable services provided in relation to business or commerce, shall mean the provision of such services to a recipient located outside India. Further, in Rule 3(2) of the Export of Service Rules, 2005, it is provided that the provision of any taxable service specified in sub-rule (1) shall be treated as export of service when the payment for such service is received by the service provid....
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....n is located outside India 3. The service is not a service specified in the section 66D of the Act. The appellant is not service rendering any covered under the Negative List 4. The place of provision of the service is outside India The place of provision of service is the location of the recipient as per Rule 3 of the POPS Rules. In the instant case, the recipient is located in Japan, and therefore, the place of provision of service is outside India. 5. The payment for such service has been received by the provider of service in convertible foreign exchange Payment has been received in foreign exchange, undisputedly. 6. The provider of service and recipient of service are not merely establishments of a distinct person Appellant and NSEC Japan are not establishments of a distinct person. The Hon'ble Gujarat High Court in the case of Linde Engineering India Pvt. Ltd. v. Union of India - 2020 (8) TMI 181 - Gujarat High Court, has held that separately incorporated holding company in a different country, and a subsidiary incorporated separately in India, are not "establishments of a distinct person" 4.5. Accordingly, since the Appellant is fulf....
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....TAT Mumbai ⮚ Verizon India Pvt. Ltd. v. Commr of Service Tax, Delhi - 2021 (45) G.S.T.L. 275 (Tri. - Del). ⮚ Blackberry India Pvt. Ltd. v. CCE, Delhi - (2023) 10 Centax 236 (Tri. - Del.) affirmed in (2023) 9 Centax 113 (Del.) ⮚ Commissioner of Central Tax, GST Commissionerate, Bengaluru East v. Informatica Business Solutions Pvt. Ltd. - (2025) 26 Centax 167 (Tri. - Bang.) ⮚ Commissioner of CGST & Central Excise, Kolkata South v. M/s. Global Reach & Anr. - 2026 (1) TMI 519 - CESTAT Kolkata 4.9. Also, reliance is placed on the Circular No. 111/5/2009-ST dated 24.02.2009 wherein also it has been clarified that for services covered under Rule 3(1)(iii), in order to qualify the service as "Export of Service", the relevant factor is the location of the service receiver and not the place of performance. It is a trite law that circulars are binding on the Department. Reliance is placed on the decision in UOI v. Arviva Industries (I) Ltd 2008 (10) STR 534 (SC). 4.10. Accordingly, placing reliance on the above, the appellant submits that the services provided by the Appellant amount to export of services, for which no serv....
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.... of dispute in the present case is prior to 14.05.2015, therefore, the Appellant was not liable to pay any service tax on the reimbursement of expenses during the relevant period. THE APPELLANT HAS RIGHTLY AVAILED THE CENVAT CREDIT AMOUNTING TO RS. 6,96,493/-. 6. The appellant submitted that the Department has denied the CENVAT Credit of Rs. 6,96,493/- during the period F.Y. 2011-12 on the grounds of failing to produce any documents in support of availing the credit. In this regard, the appellant submitted that such denial of CENVAT Credit is wholly unjustified and without any basis, since the Appellant has disclosed the availment of such CENVAT Credit in the ST-3 returns filed periodically. The Department has invoked the extended period of limitation, which is not sustainable, since the availment of such credit was disclosed in the returns. Therefore, such demand is entirely barred by limitation. Further, the Appellant submitted all the details, including the original copy of invoices in respect of such invoices on which CENVAT Credit is availed, at the time of audit as well as filing of periodical refund claims. The said fact is evident from pages 125 to 128 of the ap....
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....vailment of CENVAT Credit, which is for the FY 2011-12 only, the Appellant submits that they had duly disclosed the required details in the statutory returns. The invoices basis which CENVAT Credit was availed was not required to be enclosed with the returns. Therefore, extended period cannot be invoked. In this regard, reliance is placed on the decision of the Hon'ble CESTAT in the case of M/s. Hero MotoCorp Limited (Global Parts Center) v. Commissioner (Appeals), CE and CGST, Jaipur - 2024-VIL-437-CESTAT-DEL-CE wherein it was held that extended period of limitation cannot be invoked for non-disclosure of information which is not required to be disclosed in the ER-1 return or other statutory forms. Therefore, the demand till the period March 2014, being barred by limitation ought to be set aside. 8. The appellant submits that as the principal demand itself is not sustainable, the ancillary demands for interest and penalty have no legs to stand. Further, in view of the fact that the Appellant has not suppressed any information, the demand for penalty is not sustainable. 8.1. Regarding the Penalty of Rs. 38,600/- imposed under Section 77(1)(a) of the Finance Act, 1994, the app....
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....o is responsible for making the payment. 11.2. We find that the above said view has been held in the decision of the Larger Bench of the Tribunal in the case of Arcelor Mittal Stainless (I) Pvt. Ltd. v. Commissioner of Service Tax, Mumbai - II - (2023) 11 Centax 269 (Tri. - LB), wherein on similar set of facts, it has been held that the relevant factor for determining if a service is exported, is the location of service receiver. In the instant case, we find that NSEC Japan is receiving the Administrative and Marketing service, and is therefore, obliged to make the payment. Therefore, we find that NSEC Japan is the service recipient, which is an entity outside India. Accordingly, we hold that the Appellant have duly exported the services rendered by them to an entity located outside India, and therefore, the services rendered are categorisable as 'Export of Service'. We find that the same view has been held in the case of Kingfisher Airlines Pvt. Ltd. v. Commissioner of Service Tax, Mumbai - I - 2015 (37) S.T.R. 358 (Tri. - Mumbai). 11.3. We find that the demand in this case covers both the positive list and negative list regime. Thus, it is pertinent to refer to the provisio....
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....saction and attempted to levy service tax on the same, solely basis the contention that such services were rendered in India. We are of the view that the place of performance has no relation whatsoever, and only the location of recipient is necessary to determine the place of provision of service. In the instant case, it is on record that the Appellant has entered into agreements with NSEC Japan, wherein Administrative and Marketing Services are provided on a principal to principal basis and the service recipient is located outside India. Hence, the service rendered by the Appellant qualify as 'Export of Service'. 11.6. In support of our view, we rely upon the decision of CESTAT Chandigarh in the case of Microsoft Corporation (India) Pvt. Ltd. v. Commr. of C. Ex., Delhi - III - 2018 (18) G.S.T.L. 465 (Tri. - Chan.) which is affirmed by the Hon'ble Supreme Court in Commissioner of Service Tax - III Mumbai v. M/s. Vodafone Idea Ltd. - 2025 (8) TMI 938 - Supreme Court, in a similar set of facts wherein the assessee was providing marketing services in India, for its overseas group company in Singapore, and was charging consideration from the overseas company basis the cost plus mode....
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....e appeal paper-book which contains the periodical refund claims of the Appellant, wherein it specially mentioned that the relevant documents including copies of invoices are submitted. Therefore, we hold that the denial of CENVAT Credit of Rs. 6,96,493/- is without any basis, and hence we set aside the same. 13. The Appellant has contested the demand confirmed on the ground of limitation also. We find that the impugned order has confirmed the demand by invoking the proviso to Section 73(1) of the Finance Act, 1994. However, the Department has failed to bring to light any positive act on part of the Appellant while invoking extended period. The normal period of limitation during the relevant period was 18 months. The underlying SCN has been issued on 19.04.2016, therefore, the demand till 31.03.2014, is barred by limitation. It is a trite law that extended period cannot be invoked since the Appellant was regularly filing the statutory returns. Accordingly, we hold that the demands confirmed in the impugned order by invoking the extended period of limitation are not sustainable and hence we set aside the same. 14. Regarding the Penalty of Rs. 38,600/- imposed under Section 77(1....