2018 (6) TMI 589 - AT - Service Tax

Business Auxiliary Services - service of On Line Mail Marketing - export of services - Held that - The said issue has been discussed by the Tribunal in the case of Alpine Modular Interiors P. Ltd. V/s Commissioner of Service Tax, New Delhi 2014 (4) TMI 489 - CESTAT NEW DELHI , where Following decision of M/s GAP International Sourcing (India) Pvt. Ltd. vs. CST, Delhi 2014 (3) TMI 696 - CESTAT NEW DELHI and Paul Merchants Ltd. vs. CCE, Chandigarh 2012 (12) TMI 424 - CESTAT, DELHI (LB) it was decided in favor of assessee. Certain facts will need verification before extending the benefit of the decisions. It is to be verified whether the entire demand is covered by the decision of the Tribunal cited above or whether a part of the demand is pertaining to the similar services rendered to domestic customers. Matter remanded for de novo consideration - appeal allowed by way of remand.

Summary

Issues:
Service Tax liability on receipts from overseas customers in foreign currency for "On Line Mail Marketing" service.

Analysis:
The appellant provided "On Line Mail Marketing" services with free and paid schemes. The Department claimed Service Tax on amounts received from overseas customers in foreign currency for the period 2007-08 to 2009-10. The dispute revolved around whether the services qualified as export of services under the Business Auxiliary Service category. The Department demanded Service Tax, interest, and penalties, which were confirmed by lower authorities, leading to the appeal.

The appellant argued that payments in foreign currency for disputed services should be considered as export of services based on CBEC Circulars and a Larger Bench decision. They acknowledged liability for Service Tax on similar services to domestic clients. The Department contended that verification was needed for foreign exchange payments and total amounts received. The Tribunal noted the dispute focused on payments in foreign currency from overseas customers.

The Tribunal referenced a Larger Bench decision in a similar case and emphasized the binding nature of Tribunal decisions on the Revenue. It highlighted that the impugned order could not be sustained based on precedents, quashing it without costs. However, verification was deemed necessary to determine if the entire demand fell under the Tribunal's decision and to distinguish services for overseas and domestic clients. The matter was remanded to the Adjudicating Authority for a fresh decision considering the Tribunal's decision and verifying relevant records.

Ultimately, the appeal was allowed by remanding the case for further consideration by the Adjudicating Authority.