2024 (1) TMI 775 - AT - Service Tax

Levy of Service Tax - Business Auxiliary Service - amount received from the Foreign Companies against the services such as appraising Indian Companies about the product of foreign companies on the basis of which the Indian Companies were directly placing their purchase orders to the foreign companies - HELD THAT - It is found that the Adjudicating Authority has held that the service provided by the appellant is export of service relying on the decision in the case of M/S. BLUE STAR LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE 2008 (3) TMI 32 - CESTAT BANGALORE and the same was upheld by the Hon ble Bombay High Court reported at CST, Mumbai - VI vs. Blue Star Ltd 2018 (9) TMI 1421 - BOMBAY HIGH COURT . On perusal of the fact of the Blue Star Ltd it is observed that the fact in that case and fact of the present case are absolutely identical. Therefore, the Adjudicating Authority has rightly relied upon this decision. The respondent has provided the services to the foreign companies in relation to sales promotion and marketing of the goods of foreign company, therefore the service was received by not an Indian supplier of goods but the foreign companies who exported goods to India. In this case the Indian customers who purchased the goods from foreign companies are not the recipient of services of business auxiliary provided by the respondent. Therefore, it is incorrect to contend that service was consumed within India. In fact the service is consumed in aboard in the hands of the foreign companies who engaged the respondent for providing the services of sales promotion and marketing, therefore, the contention of the Revenue in their appeal is apparently incorrect as per the facts of the present case. The impugned order is upheld - appeal filed by the revenue is dismissed.

Summary

Issues involved:
The issue in this case involves determining whether the services provided by the appellant to foreign companies for marketing and sales promotion, where the service receiver is located in India, are liable to service tax under the category of Business Auxiliary Service.

Comprehensive details of the judgment:

1. The appellant received an amount from Foreign Companies for services provided in India, leading to a show cause notice being issued by the department for service tax under Business Auxiliary Service.

2. The Revenue argued that since the service was provided and consumed in India, there was no export of service, making it taxable under Business Auxiliary Service.

3. The Respondent cited various judgments to support their claim that the services provided to foreign companies constitute an export of service.

4. The Adjudicating Authority held that the service provided by the appellant qualifies as an export of service, based on previous judgments, which was upheld by the Bombay High Court.

5. The Revenue's appeal against the judgment was based on the filing of an appeal before the Supreme Court, but it was found that the merit and facts of the case were directly applicable to the present case.

6. It was argued that the service was consumed by the foreign companies abroad, not in India, as the Indian customers purchasing goods from foreign companies were not the recipients of the services provided by the appellant.

7. The Tribunal supported the findings of the Adjudicating Authority, emphasizing that the service was consumed abroad by the foreign companies, and upheld the impugned order while dismissing the appeal filed by the revenue.

This judgment highlights the importance of analyzing the location of service consumption and the recipient of services in determining the tax liability under Business Auxiliary Service for services provided to foreign companies. The Tribunal's decision was based on a thorough examination of relevant case laws and factual circumstances, ultimately affirming the export of service in this particular case.