9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 611 - AT - Service TaxExtended period of limitation - export of service under Joint Venture - revenue neutrality - Extended period of limitation - suppression of facts or not - HELD THAT - The Appellant has provided services, being BAS, in Joint Venture or partnership, to M/s MS of Romania. As the service has been provided in respect of marketing of products manufactured by M/s MS of Romania, the Joint Venture partner - M/s KSE cannot be the recipient of such service in the first instance. Further, the element of partnership is present in the MoU between the Appellant and M/s KSE, as they have agreed to share the profits from the commission earned by providing service to the foreign principal located at Romania. Further, it is an admitted fact that the service in question has been received by M/s MS of Romania who have paid for the same in convertible foreign exchange - it is further held that it does not make any material difference that the Appellants have received their share of commission through M/s KSE. Extended period of limitation - suppression of facts or not - HELD THAT - There is no element of fraud, suppression, misdeclaration, etc. The Appellant was registered with the Department and have disclosed such turnover or receipt of commission for BAS, and they have rightly claimed the same to be exempt, being export of service. Accordingly, extended period of limitation is not invokable, in the facts and circumstances of the case. The impugned order set aside - appeal allowed.
Issues involved:
The issues involved in this Appeal are whether the demand for extended period has been rightly confirmed, whether the Appellants have exported their service under Joint Venture, and whether the situation is revenue neutral. Extended Period Demand: The Appellant, registered under Service Tax, provided 'Business Auxiliary Services' in Joint Venture with M/s KSE for marketing seamless steel pipes produced by M/s MS. The Department contended that the service did not qualify as 'export of service' as it was not directly provided to M/s MS and the commission was not received in convertible currency. The SCN demanded payment of Rs.8,13,657 for the period 01.01.2006 to 31.03.2006. The Adjudicating Authority and Commissioner (Appeals) upheld the demand. The Appellant argued that the service was provided to M/s MS through the Joint Venture with M/s KSE and qualified as export of service. Export of Service under Joint Venture: The Appellant, in a Joint Venture with M/s KSE, marketed products for M/s MS located in Romania. The Appellant claimed the turnover as exempt, being export of service, as the service was provided from India, delivered outside India, and used in business outside India by M/s MS. The Appellant emphasized that the service recipient was M/s MS, even though there was no direct contract between them. The Appellant's share of commission was received in convertible foreign exchange, supporting the claim of export of service. Revenue Neutrality and Privity of Contract: The Appellant argued that the situation was revenue neutral as the service tax paid was available as Cenvat credit to M/s KSE for export of service. The Appellant maintained that there was no privity of contract between them and M/s MS, but the Joint Venture Agreement clearly indicated that the recipient of the services was the manufacturer in Romania. The Appellant's entitlement to 50% of the commission further demonstrated the Joint Venture nature of the arrangement. Decision: The Tribunal found that the Appellant provided BAS in Joint Venture with M/s MS of Romania, and M/s KSE could not be the initial recipient of the service. The partnership element was evident in the profit-sharing agreement between the Appellant and M/s KSE. The service was received by M/s MS of Romania, who paid in convertible foreign exchange. The Tribunal concluded that the Appellant rightly claimed exemption as export of service and that the extended period of limitation was not applicable. The Appeal was allowed, and the Impugned Order was set aside, granting the Appellant consequential benefits.
|
