2018 (5) TMI 1128 - AT - Service Tax

Liability of service tax - export of services or not? - the appellant was providing services to their foreign principal by helping them sell their products to their customers in India. The service commission received by the appellant is the remuneration for the sales of their principal‟s product in India. - Held that - the appellants are providing the service of getting order from India for exporting of goods by the foreign principal and they are getting commission in convertible foreign exchange - in the present case, all the conditions as laid down in Rule 3(2) of Export of Service Rules, 2005 are satisfied. The services rendered by the appellant fall in the definition of Export of Service and therefore, the appellants are not liable to pay the Service Tax - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Stay application for early hearing
- Granting stay based on previous order
- Appeals against Order-in-Appeal rejection
- Interpretation of Export of Service Rules
- Applicability of judicial precedents

Stay Application for Early Hearing:
The appellant moved a miscellaneous application for early hearing of the stay application due to pending status. The Tribunal allowed the early hearing application and directed the connection of the appeal with another listed for final hearing.

Granting Stay Based on Previous Order:
In a connected appeal where complete waiver of pre-deposit was granted earlier, the Tribunal decided to grant stay in the present appeal as well, following the previous stay order.

Appeals Against Order-in-Appeal Rejection:
The appeals were directed against the Order-in-Appeal rejecting the appellant's appeal, upholding the demand and penalties imposed by the adjudicating authority. The Commissioner (A) rejected the appellant's appeal, leading to the present appeals.

Interpretation of Export of Service Rules:
The appellant was providing services to a foreign principal for selling products in India, receiving service commission. The issue was whether these services qualified as "Export of Service" under Rule 3(2) of Export of Service Rules, 2005. The Tribunal found that all conditions under the rule were met, and the services fell under the definition of "Export of Service."

Applicability of Judicial Precedents:
The appellant argued that the impugned order was contrary to binding judicial precedent and passed without considering the Act's scheme. The Tribunal agreed with the appellant, noting that the impugned orders were based on assumptions and presumptions. By relying on various decisions, the Tribunal concluded that the services rendered by the appellant qualified as "Export of Service," setting aside the impugned orders and ruling in favor of the appellant.