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2023 (7) TMI 1179 - AT - Service TaxLevy of Service Tax - Business Auxiliary Service or not - services offered in connection with money transfer service provided by PML are in pursuant to an agreement made with Western Union - demand alongwith interest and penalty - extended period of limitation - HELD THAT - This issue is no more res-integra and has been settled by various decisions of the Tribunal in the case of M/S PAUL MERCHANTS LIMITED OTHERS VERSUS CCE, CHANDIGARH 2012 (12) TMI 424 - CESTAT, DELHI (LB) wherein the Larger Bench has considered this issue in detail and has held that The consumer of the service provided by the agents and sub-agents of WU in India is the Western Union, located abroad who use their services for their money transfer business not the persons receiving money in India. Since the service provided is Business Auxiliary Service classifiable under Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 2005, and has been provided in relation to business of Western Union located abroad, and the payment for the service has been received in India in convertible foreign currency, the same has to be treated as export of service. The impugned order is not sustainable in law and the same is set aside - Appeal allowed.
Issues involved:
The judgment involves the issue of liability to pay service tax under "Business Auxiliary Service" based on the nature of services provided by the appellant. Facts and Decision: The case revolved around the appellant's engagement in the business of "Money Transfer service" as a primary agent of Western Union. The appellant received commission in convertible foreign exchange for providing money transfer services to Western Union. The appellant shared this commission with sub-agents, and payments were made in Indian Rupees. A show cause notice was issued demanding service tax, interest, and penalties. The Deputy Commissioner confirmed the demand, which was upheld by the Commissioner (Appeals). The Tribunal examined the issue of whether the appellant was liable to pay service tax under "Business Auxiliary Service." Legal Precedents: The Tribunal referred to various decisions, including the case of M/s Paul Merchants Ltd. Vs. CCE, which established that the service provided by agents/sub-agents to Western Union constituted "business auxiliary service." The Tribunal emphasized that the recipient and consumer of the service were Western Union, not the individuals receiving money in India. The destination of the service was determined based on the place of consumption, not the place of performance. The Tribunal also cited the case of Muthoot Fincorp Ltd Vs. CCE, which further clarified that the ultimate beneficiary of the transaction was Western Union, situated outside India. Decision and Ruling: After analyzing the facts and legal precedents, the Tribunal concluded that the impugned order was not sustainable in law. The Tribunal set aside the order and allowed the appeal of the appellant with consequential relief, if any, as per the law. The judgment highlighted the importance of determining the recipient and consumer of the service in cases involving international transactions and clarified the applicability of service tax under "Business Auxiliary Service." Separate Judgment: The judgment was delivered by Hon'ble Mr. S. S. Garg, Member (Judicial), and Hon'ble Mr. P. Anjani Kumar, Member (Technical) of the Appellate Tribunal CESTAT Chandigarh.
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