2015 (11) TMI 727 - AT - Service Tax

Denial of refund claim - Refund of service tax paid on the commission received for the services exported to foreign principals in respect of import of textile machinery by parties based in India - Held that - Since it is an admitted fact that there is a double payment of service tax of an amount of ₹ 70,000/- we find that the appeal filed by the appellant needs to be allowed to that extent As regards the refund of an amount of ₹ 73,272, said amount was paid under reverse charge mechanism under the category of Business Auxiliary Services for the commission received by them. Appellant had provided foreign principals various inputs as to the requirement of trade in India during the period March 2005. We find that the appellant had rendered the services relating to sales promotion, marketing, procurement of order and other customer related services. We find strong force in the contentions raised by the learned C.A. that in the appellant s own case, this Bench has clearly held that the services rendered by this very appellant in procuring orders from Indian Company and passing on to various overseas manufacturers will amount to export of services. - Decided in favour of assessee.

Summary

Issues:
1. Refund claim regarding service tax paid twice.
2. Refund claim regarding service tax on commission received for services exported to foreign principals.

Analysis:
1. The appeal concerned a refund claim filed by the appellant, which was rejected by the lower authorities. The appellant claimed a refund for service tax paid twice, amounting to Rs. 70,000. The jurisdictional Asst. Commissioner confirmed the double payment. The Tribunal directed verification, and it was found that the tax was paid both at the time of TDS booking and on realization of the gross amount. The appeal was allowed for the refund of Rs. 70,000.

2. The second issue involved a refund claim of Rs. 73,272 for service tax on commission received for services exported to foreign principals. The appellant contended that the services provided to foreign principals constituted export of services. The Tribunal had previously ruled in favor of the appellant on a similar issue. The appellant had rendered services related to sales promotion, marketing, and procurement of orders. The Tribunal found merit in the appellant's arguments and set aside the impugned order, allowing the appeal for the refund of Rs. 73,272.