2024 (6) TMI 346 - AT - Service Tax

Export of services or not - services related to sales promotion of goods in India provided by the appellant to the recipients located outside India - export of service Rules, 2005 and Rule 6A of the Service Tax Rules, 1994 - HELD THAT - The appellant have provided Sales Promotion service in India for and on behalf of the foreign service recipient for promotion of goods belonging to the foreign service recipient. In these facts, the payment against such service received in India in convertible foreign exchange, it is settled legal position that appellant s service is export of service hence, cannot be liable to service tax. The very identical case on the same issue, in the appellant s own case JM HUBER INDIA PVT LTD. VERSUS C.C.E. S.T. -SURAT-II 2022 (11) TMI 1491 - CESTAT AHMEDABAD , this Tribunal held that ' the appellant s activity is squarely covered under Rule 3(1)(iii) read with Sub-Rule (2) of Rule 3 of Export of Service Rules, 2005 therefore, the service of the appellant is clearly covered under export of service.' From the above decision in the appellant s own case, it is observed that very identical issue only for the different period has been decided in favour of the appellant and hence the activity is not liable to service tax. The case of the appellant is also supported by catena of judgments cited by learned Counsel. Accordingly, the issue in no longer res-integra. The impugned order is set-aside - Appeal allowed.

Summary

Issues:
Whether services related to sales promotion of goods in India provided by the appellant to recipients located outside India qualify as export of service under the Export of Service Rules, 2005 and Rule 6A of the Service Tax Rules, 1994.

Analysis:
The appellant provided various services related to sales promotion of goods in India to a company situated outside India during 2010-11 to 2012-13, receiving commission in convertible foreign exchange. The department contended that since the service was related to sales promotion in India, it should be taxable. However, the appellant argued that even though the service was performed in India, since the recipient of the service was located abroad, it should be considered export of service and not taxable. The appellant cited several judgments supporting their position, including Evonik Specialty India Pvt. Limited, Solvay Specialities India Pvt Limited, and others.

The appellant further argued that the show cause notice issued for the period 2010-11 to 2012-13 invoked an extended period, which is not permissible when the same issue has already been addressed in an earlier notice. The Revenue reiterated the findings of the impugned order, maintaining that the service should be taxable.

After considering the submissions and records, the Tribunal found that the appellant provided sales promotion service in India for a foreign service recipient, with payment received in convertible foreign exchange. Citing a previous order in the appellant's own case, the Tribunal concluded that the service qualified as export of service under Rule 3 of the Export of Service Rules, 2005. The Tribunal referenced the conditions for qualifying as export of service, including the service being provided from India and used outside India, as well as payment received in convertible foreign exchange. The Tribunal noted that the appellant's activity fell under these conditions and was not taxable.

Based on the previous order in the appellant's own case and the supporting judgments cited, the Tribunal set aside the impugned order, allowing the appeal. The Tribunal emphasized that the issue was no longer res-integra, as it had been decided in favor of the appellant in a similar case. The decision was dictated and pronounced in open court on 05.06.2024.