2009 (5) TMI 238 - AT - Service Tax

Exemptions claimed as services exported - The appellants recommended the products of certain parties abroad to various buyers in India. The foreign supplier paid commission to the appellant on account of the sale of their product to the buyer recommended by the appellant. The entire amount was received in foreign exchange appellant stated that in respect of the amount received from the foreign party, the same was exempted from payment of Service Tax vide Notification No. 21/2002-S.T., dated 20-11-2003 up to 3-3-2005. Even the period after rescinding of the Notification would be covered by the fact that the services were exported and would not be liable for payment of Service Tax. However, this point has not been taken up by the Commissioner (A), as the appellant did not produce the evidence before him - As regards the confirmation of Service Tax under the category of Business Auxiliary Services , it was urged that major part of the Service Tax is time barred but there is no finding in the impugned order with regard to the submissions on ground of limitation. further there is no finding in impugned order that evidence on intent to evade tax absent In these circumstances, we have no other option but to remand the matter to the Original Authority for deciding the issue de novo

Summary

Issues:
1. Receipt of foreign exchange and benefit of exemption from Service Tax for export of services.
2. Limitation.

Analysis:
1. Receipt of foreign exchange and benefit of exemption from Service Tax for export of services:
The case involved the appellants, who were manufacturers of construction and earth moving equipments, receiving commissions from both domestic and foreign entities for recommending their products to clients in India. The appellants argued that the amount received from the foreign party was exempt from Service Tax under Notification No. 21/2002-S.T. dated 20-11-2003 until a certain date. They further contended that even after the rescinding of the notification, the services provided were exported and thus not liable for Service Tax. However, the Commissioner (A) did not consider this argument as the appellants failed to produce evidence supporting their claim. The Tribunal noted that there was no finding in the impugned order regarding the submissions on the ground of limitation. Consequently, the matter was remanded to the Original Authority for a fresh decision, emphasizing the need for the Authority to consider the exemption claim and limitation issue while observing the Principles of Natural Justice.

2. Limitation:
The Tribunal highlighted that there was no specific finding in the impugned order addressing the submissions made by the appellants on the grounds of limitation concerning the Service Tax under the category of 'Business Auxiliary Services'. The appellants argued that a significant portion of the Service Tax was time-barred. Due to the lack of a conclusive finding on this matter, the Tribunal decided to remand the case to the Original Authority for a fresh determination. The Tribunal directed the Original Authority to provide findings on the points raised by the appellants within four months from the receipt of the order, ensuring adherence to the Principles of Natural Justice. The impugned order was set aside, and the appeal was allowed by way of remand, encompassing both the stay and appeal proceedings.

In conclusion, the Tribunal's judgment focused on the issues of exemption from Service Tax for services exported for foreign exchange and the applicability of limitation in the context of Business Auxiliary Services. The decision underscored the importance of evidence presentation, consideration of exemption provisions, and addressing limitation concerns in a thorough and principled manner, ultimately leading to a remand for a fresh decision by the Original Authority.