2019 (8) TMI 1692 - AT - Service Tax

Exemption from tax or not - services of foreign commission agent - eligibility of N/N. 18/2009-ST dated 07.07.2009 - HELD THAT - The Notification exempts the services provided by the commission agent located outside India and engaged under contract or agreement or any document by the exporter to act on their behalf for sale of the exported goods. The conditions for availment of the Notification are prescribed in the Notification itself. It is on record that the appellant has complied with all the conditions, as prescribed in the Notification and also filed EXP-1 declaration and EXP-2 Returns appropriately. Learned Commissioner (Appeal) has rejected the appeal on the ground that the conditions No. 4 of the Notification has not been fulfilled by the appellant - It is also evident from the record of the case that the appellant has submitted the required information as per the Notification to the Jurisdictional Deputy/Assistant Commissioner, who is the competent authority to monitor the claim of exemption under the Notification. The Assistant Commissioner/Deputy Commissioner has not objected the appellant s claim regarding the exemption Notification. Therefore, finding of the Commissioner (Appeal) that the shipping bills/bill of export has not been produced is an incorrect appreciation of the conditions of the said Notification. The payment made by the appellant towards the service tax, in duress, will not be sufficient to deny exemption to the appellant - reliance can be placed in the case of M/S PRAJ INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III 2017 (4) TMI 1286 - CESTAT, MUMBAI where it was held that Reading of the notification shows that the conditions are regulatory in nature and not mandatory to avail the exemption. If the procedure prescribed is not fulfilled there would be no consequence of denial of the benefit of the notification. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Entitlement to exemption under Notification No. 18/2009-ST.
2. Compliance with conditions of Notification No. 18/2009-ST.
3. Time-barred demand.
4. Validity of payment made under duress.
5. Rejection of appeal by Commissioner (Appeals).

Issue-wise Detailed Analysis:

1. Entitlement to Exemption under Notification No. 18/2009-ST:
The appellant claimed exemption from service tax under Notification No. 18/2009-ST for services received from foreign commission agents. The exemption applies to services provided by a commission agent located outside India, engaged under a contract or agreement by the exporter to act on their behalf for the sale of exported goods. The Tribunal noted that the appellant had complied with all the conditions prescribed in the Notification, including filing the necessary declarations (EXP-1 and EXP-2 returns).

2. Compliance with Conditions of Notification No. 18/2009-ST:
The Commissioner (Appeals) rejected the appellant's claim on the grounds that they did not produce shipping bills/bills of export and other documents. However, the Tribunal found that the Notification does not require presenting these documents along with EXP-2 returns. The details of the shipping bills were mentioned in the returns, and the appellant had submitted the required information to the Jurisdictional Deputy/Assistant Commissioner, who did not object to the appellant's claim. Therefore, the Tribunal concluded that the appellant had fulfilled the conditions of the Notification.

3. Time-barred Demand:
The appellant argued that the demand was time-barred as they had been regularly filing half-yearly returns in the form of EXP-2 declarations. The Tribunal did not specifically address this argument in the judgment, but the overall decision to allow the appeal implies that the time-barred issue was not a significant factor in denying the exemption.

4. Validity of Payment Made Under Duress:
The appellant contended that they paid the service tax under pressure from the departmental officers. The Tribunal acknowledged that the payment made under duress would not be sufficient to deny the exemption. The Tribunal referenced similar cases where the benefit of the exemption Notification was allowed under similar circumstances.

5. Rejection of Appeal by Commissioner (Appeals):
The Commissioner (Appeals) had rejected the appeal based on the incorrect appreciation of the conditions of the Notification. The Tribunal found that the Commissioner (Appeals) erred in concluding that the appellant did not fulfill the required provisions of the Notification. The Tribunal set aside the impugned order, finding it unsustainable.

Conclusion:
The Tribunal allowed the appeal, granting the appellant the consequential benefit of the exemption under Notification No. 18/2009-ST. The Tribunal's decision was based on the appellant's compliance with the Notification's conditions and the incorrect findings of the Commissioner (Appeals). The Tribunal also referenced previous similar cases where the exemption was granted, reinforcing their decision.