2014 (12) TMI 204 - AT - Service Tax

Business Auxiliary Service - Processing of Textile materials for chemical wash - Exemption under Notification No.14/2004-ST dated 10.9.2004 - Held that - On scrutiny of the records of the appellants, it was noticed that the appellant had paid the amount towards processing of textile materials for chemical wash charges to M/s. Testex, Swiss, Glancario and Reni Hendriks, Holand. So, there is no dispute of the fact that the appellant paid the charges for textile processing. Hence, they are eligible for exemption benefit under Notification No. 14/2004-ST dated 10.9.2004, as amended. In the present case, there is no dispute of the facts and therefore, in the facts and circumstances of the case, we find that the appellants are eligible for the exemption benefit. - Decided in favour of assessee.

Summary

Issues:
1. Proper signing of appeal papers under CESTAT (Procedure) Rules, 1982.
2. Tax liability under 'Business Exhibition Service' and 'Technical Inspection and Certification Service'.
3. Exemption under Notification No. 14/2004-ST for 'processing of Textile materials for chemical wash' under 'Business Auxiliary Service'.

Analysis:

Issue 1: Proper signing of appeal papers
The Revenue argued that the appeal was not signed by the authorized person as per the CESTAT (Procedure) Rules, 1982. However, the appellant presented a Board Resolution authorizing a specific individual to sign all papers before the authorities. The Tribunal found the Board Resolution valid, thereby dismissing the Revenue's submission.

Issue 2: Tax liability under 'Business Exhibition Service' and 'Technical Inspection and Certification Service'
The Tribunal observed that the demand of tax was raised under these categories, where the appellant had paid foreign agencies for conducting business fairs abroad. Referring to a previous order in the appellant's case, the Tribunal noted that services performed outside India by foreign service providers do not attract service tax liability under Section 66A of the Finance Act, 1994. Relying on relevant provisions and case laws, the Tribunal allowed the appeal, setting aside the impugned order.

Issue 3: Exemption under Notification No. 14/2004-ST
Regarding the tax demand on 'processing of Textile materials for chemical wash' under 'Business Auxiliary Service', the appellant claimed exemption under Notification No. 14/2004-ST. The Revenue objected, stating that this claim was not raised earlier. However, upon verifying that the appellant had indeed paid charges for textile processing to foreign entities, the Tribunal held that the appellant was eligible for the exemption benefit under the said notification. Consequently, the Tribunal allowed the appeal and granted consequential relief, in line with the earlier order.

In conclusion, the Tribunal found in favor of the appellant on all the issues discussed, highlighting the importance of proper authorization for signing appeal papers, the non-liability of service tax on services performed abroad, and the eligibility for exemption benefits under relevant notifications. The appeal was allowed, and the impugned order was set aside, providing the appellant with the necessary relief.