2012 (6) TMI 455 - AT - Service Tax

Waiver of pre-deposit - overriding commission from the foreign company - demanded Service Tax Held that - no categorical finding as to whether the service rendered by the appellant was received by the foreign company or not. - Appellant is supported by Board s circular and Rule 3(1)(iii) read with Rule 4 of the Export of Service Rules, 2005. Waiver of pre-deposit granted.

Summary

Issues:
1. Applicability of Service Tax on overriding commission from a foreign company.
2. Claim of export of service under Rule 3(1)(iii) of Export of Services Rules, 2005.
3. Prima facie case for waiver of pre-deposit and stay of recovery.

Analysis:
1. The case involved a demand for Service Tax on an overriding commission received by the appellant from a foreign company for services provided. The original authority demanded Service Tax on the entire commission amount, while the appellate authority restricted it to a specific period. The appellant sought waiver of pre-deposit and stay of recovery for the remaining amount of Rs.9,22,102/- and associated penalties.

2. The appellant claimed that the service provided was exported as the recipient was located outside India with no office in India, and the consideration was received in convertible foreign exchange. The appellant relied on Rule 3(1)(iii) of the Export of Services Rules, 2005, and a Board's Circular for support. The appellant argued that the service should be considered as exported, citing relevant decisions.

3. The Revenue contended that the appellant failed to prove that the service was exported to Singapore, highlighting findings from the Order-in-Original. The Revenue emphasized that the appellant did not demonstrate that the commission was received in convertible foreign exchange. However, the Tribunal found that a prima facie case was established by the appellant. It was acknowledged that the Business Auxiliary Service was provided to a foreign company, and there was no conclusive evidence that the service was received in India. The Tribunal noted that the consideration was received in convertible foreign exchange, supporting the appellant's claim under Rule 3(1)(iii) and relevant circulars. Consequently, the Tribunal granted waiver of pre-deposit and stay of recovery for the outstanding dues, ruling in favor of the appellant.

This detailed analysis of the judgment provides a comprehensive understanding of the issues addressed and the Tribunal's decision in the case.