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TMI Blog2014 (2) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant. As per the terms of the contract between the applicant and the buyers abroad, the applicants were entitled for a commission based on the FOB value of the goods exported. This commission was realised by retaining a margin while transferring the letters of credit. 4. There has been a dispute in this matter between the applicant and Revenue on the question as to taxability of the margin on Letters of Credit retained by the applicant. Show Cause Notices have been issued periodically demanding tax on such amounts considering it as consideration for Business Auxiliary Service rendered by the applicants to the vendors and to the buyers abroad. Revenue was also of the view that the service was 'delivered in India' and not exported. Therefore, Revenue has not considered it as an export of service and consequently they raised demand for the periods April 2007 to September 2008 by issue of four show cause notices and the notices have been adjudicated. There are confirmed demands along with interest and penalties. Details of tax amounts demanded are tabulated below :- Sl. No. Period Appeal No. Tax Demanded & Particulars 1. Apri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of the second beneficiary's bankers towards payment of their bill. The margin amount is credited to the first beneficary's (M/s.Fifth Avenue Sourcing P. Ltd.) current/EEFC account with us. This way, the entire transaction comes to its logical end. 3. We send herewith the photo copies of the following documents in respect of the captioned Bill, referred to in your letter. a) Bill of Exchange for Euro 4765.20 drawn by Second Beneficiary, East Coast Clothing Co. Ltd. Tirupur. b) Invoice No.05/09.09.06 for Eur 4765.20 c) Bill of Lading No.701061400825 dt. 16.9.2006. d) Covering Schedule from Union Bank of India, Chennai Overseas Br. forwarding the export documents drawn by East Coast Clothing P. Ltd. to us. e) Bill of Exchange for Euro 5513.59 drawn by Fifth Avenue Sourcing P. Ltd. f) Invoice No.05/09.09.06 for Euro 5513.59 drawn by fifty Av. Sourcing P. Ltd. g) Letter from Fifth Avenue Sourcing submitting the export documents to us. h) Our letter dt. 09.10.2006 to LC Issuing Bank, Deutsche Bank, Dusseldorf, presenting the documents drawn on their LC No.0030001798101. i) Payment Advice received from our Paris Br. dt. 16.10.06. j) Credit Advice dt. 09.10.2006 for Rs.36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recipient is the foreign buyer. The Ld Advocate for applicant relies on the following orders where stay petition was allowed without pre-deposit in similar cases:- (i) Gap International Sourcing (India) Pvt Ltd Vs. CCE 2009 (15) STR 270 (Tri-Del) (ii) M/s Kishore Kumar and Company (Exports) Pvt Ltd -2012-TIOL-622-CESTAT-BANG 9. Therefore, the advocate requests that appeals may be admitted without any pre-deposit. 10. Opposing the prayer, Ld. AR for Revenue submits that the dispute about classification is not material at stay stage because both under 'Business Auxiliary Service' and 'Business Support Service', the criteria for determining whether it is export of service were the same. During the material period, both 'Business Auxiliary Service' and 'Business Support Service' were taxable and just for the reason that there is doubt about classification, pre-deposit cannot be waived. He points out that the decisions relied upon by the applicant in their own case and the case of their group company were for a period prior to the date during which Business Support Service was made taxable. 11. He submits that appellant is providing service to both sides viz. purchaser abroad and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit, which may give some support to the grounds as argued by Revenue, has not been brought on record. Samples of Invoices raised by the vendors are part of the appeal papers. Corresponding invoices and Bills of Exchange raised by the applicant on the foreign buyer after adding the commission of the applicant are also on record. These documents are in conformity with the mode of transaction as described by Bank of India in letter dated 05-10-2007. Prima facie, we note that the invoices raised by the vendors were for the value of the goods and the vendors were satisfied with the values of the goods that were being paid to them and they were not concerned with the foreign exchange value that was realized by the appellant by raising extra amount on the foreign buyer. As per the contract between the applicant and the foreign buyers this amount was towards services rendered by the applicant to the foreign buyer. The argument of Revenue is that this consideration is towards services rendered to vendors as well as foreign buyers. However, there is no demonstration of payments received from the vendors or agreements by vendors for payment of any consideration to the applicant. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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