2017 (10) TMI 1231 - AT - Service Tax

Levy of service tax - collection charges of the Indian bankers who in turn send the same to the appellant for collection to the foreign bankers - Held that - it appears that while exporting their goods, they lodged their bills for collection to the Indian Bankers who in turn send the same to the foreign banks. The foreign banks while remitting the money to the Indian Bank, deduct their charges for collection of bills which in turn are charged by the Indian Banks from the appellants. When it is so, then the appellant are not entitled to pay the service tax - identical issue decided in the case of GREENPLY INDUSTRIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I 2015 (12) TMI 80 - CESTAT NEW DELHI , where it was held that No documents have been produced showing that foreign bank has charged any amount from the appellant directly. The facts as narrated in the impugned order clearly indicate that it is the ING Vyasa Bank who had paid the charges to the foreign bank. In view of this, the appellant cannot be treated as service recipient and no Service Tax can be charged from them under Section 66A read with Rule 2(l)(2)(iv) of the Service Tax Rules, 1994. Levy of service tax - conducting the handicrafts fairs in the foreign countries - Held that - the appellant has participated in a fair organised in foreign country. The appellant paid huge charges for allotment of booth/ space and other arrangements to the Council. There is no dispute that the services were performed outside India - the issue has come up before the Tribunal in the case of Paramount Communication Ltd. Vs. CCE 2017 (1) TMI 1426 - CESTAT, NEW DELHI , where it was held that there is no liability for the Indian assessee when the Business Exhibition Service is entirely performed outside India. Levy of service tax - services of truck operators for inward transportation of goods - Held that - the identical issue has come up before the Tribunal in the case of South Eastern Coalfields Vs. Commissioner 2016 (8) TMI 677 - CESTAT NEW DELHI , where it was held that tax liability under Goods Transport Agency service cannot be sustained against the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Service tax liability on collection charges by Indian bankers for export bills.
2. Service tax liability on charges for participating in fairs organized in foreign countries.
3. Service tax liability on services provided by truck operators for inward transportation of goods.

Analysis:
1. The first issue revolves around the service tax liability on collection charges levied by Indian bankers for export bills. The Tribunal considered the appellant's case in light of a previous judgment involving Greenply Industries Ltd. The Tribunal noted that the foreign bank did not directly charge any amount from the appellant, and it was the Indian bank that paid the charges to the foreign bank. Therefore, the appellant could not be considered a service recipient, and no service tax could be charged. Citing the earlier decision, the Tribunal allowed the claim of the appellant in this regard.

2. The second issue concerns the demand for service tax on charges for participating in fairs organized in foreign countries. The Tribunal referred to a previous case involving Paramount Communication Ltd. where it was established that when services are entirely performed outside India, there is no liability for the Indian assessee. Following this precedent, the Tribunal set aside the impugned order and allowed the appellant's claim related to the demand for conducting handicraft fairs in foreign countries.

3. The third issue pertains to the service tax liability on services provided by truck operators for inward transportation of goods. The Tribunal examined a similar case involving South Eastern Coalfields and emphasized the requirement for a consignment note to classify a person as a "goods transport agency." It was noted that in the absence of consignment notes being issued by the transporter, the tax liability under Goods Transport Agency (GTA) does not arise. Referring to past judgments, including one involving Northern Coalfields Limited, the Tribunal concluded that the appellant's claim was valid and set aside the impugned order.

In conclusion, the Tribunal set aside the impugned order on all three issues, allowing the appellant's claims related to service tax liabilities on collection charges by Indian bankers, charges for participating in fairs in foreign countries, and services provided by truck operators for inward transportation of goods.