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TMI Blog2014 (12) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived by the appellant as distributors of their foreign principal M/s. Cargill Fertilizers Inc., USA (CFI) for the sale and purchase of the fertilizer manufactured by the foreign principal under an agreement. That a service tax demand of Rs. 3.4 Crore (approximately) pertains to the amounts received from the principal CFI as an incentive for reduction of ocean freight for the principal due to faster unloading of cargo at appellants facilities created at Rozy Port. That the remaining amount demanded pertains to receipt towards C&F Agent services, which is outsourced by the appellant. 2.1 It was argued by the learned Advocate Shri Narsimhan that without contesting the classification of services, the services provided to their principal abroad as distributors and commission agents under Business Auxiliary Services will be a case of export of services as per Export services Rules, 2005 read with CBEC Circular No. 111/5/2009-ST dated 24.02.2009 and 141/10/2009-TRU dated 13.05.2011 and will be covered by category -III of Rule 3(1) (iii) of the Export of Services Rules, 2005. Learned advocate relied upon the following case laws:- (a) Microsoft Corporation (I) (P) Limited vs. CCE - [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered separately and can not be considered as a single contract in view of the following case laws:- (i) Mosaic India Pvt. Limited - [OIO No. 32/COMMR/2013 dated 11.03.2013/ 13.03.2013] (ii) Western Agencies Pvt. Limited vs. CCE [2011 (22) STR 305 (LB)] & 24 STRJ-50 (Mad)] (iii) Jain Carrying Corporation vs. CCE Jaipur [Final Order No. ST/A/53993/2014-CU dated 19.09.2014] (iv) State of Madras vs. Gannon Dunderley & Company (Madras) Limited - [AIR 1958 SC 560] (v) Essar Projects (India) Limited vs. CCE - [2014 (33) STR 696 (Tri.)] (vi) R.K. Transport Company vs. CCE - [2012 (27) STR 496 (Tri.)] (vii) CCE vs. Kulcip Medicines (P) Limited - [2009 (14) STR 608 (P&H)] (viii) Commissioner vs. Kulcip Medicines (P) Limited - [2012 (25) STR J127 SC)] 2.5 It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the case of the appellant that without contesting the leviability of Distribution fee/ Agency fee received from the foreign principal under 'Commission Sales Agreement' and 'Non-exclusive Distributor Agreement', the activities undertaken by them under these categories will result in export of services and no service tax is leviable. Appellant relied upon several CBEC Circulars, Export of Service Rules, 2005 and case laws to drive home the point that these activities, even if considered as providing of services, will be export of services. From the case laws relied upon by the appellant, it is observed that this issue is no more res-integra. In the case of M/s. GAP International Sourcing (India) Private Limited vs. CST [2011-TIOL-465-CESTAT-DEL.], it was held under similar facts that services rendered was export of services. Facts of that case and ratio laid down by the CESTAT, Delhi is as follows:- The appellant are a company registered in India and are subsidiary of M/s GAP International Sourcing, Inc., U.S.A. who are a prominent retailer in U.S.A. and other countries. The appellant entered into a service support agreement with M/s GAP, U.S.A. for rendering various services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery of the service is the same. Therefore the condition regarding delivery of service being outside India and use of service being outside India prescribed in Rule 3 (2) of Export of Service Rules, 2005 were superfluous and for this reason only, these conditions were deleted, first, the condition regarding delivery of service being outside India was deleted with effect from 01.3.2007 and thereafter the condition regarding use of service being outside India was deleted with effect from 27.02.2010. These amendments, therefore, have to be treated as clarificatory amendments. Therefore if some service covered by Rule 3 (1) (iii) of Export of Service Rules, 2005, i.e. service in relation to business or commerce, has been provided by a person in India to a company located abroad, not having any branch or establishment in India, for use in its business, the service provided in India shall be treated as export, if the payment has been received in convertible foreign exchange. The performance of such service in India, would not make them received/consumed in India, if beneficiary user/recipient of said service provided in relation to business or commerce, who has paid for these service and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has to be a service provider and a service recipient. One cannot be held to be a service provider to ones own self. On the same issue of the appellant for a subsequent period adjudicating authority has dropped the demand under OIO No. 32/COMMR/2013 dated 11.3.2013. In view of these observations appeal of the appellant with respect to service tax on amount received from the principal on saving in ocean freight is required to be allowed. 7. On the last issue of charging service tax on services of Cargo Handling, Customs Clearance, Port Services and Transportation as composite services, appellant argued that these were separate services provided by the appellant under different contracts and have to be treated as separate services. It is observed from the case records that it is not a case where an earlier composite contract, without distinction of different services and amounts payable for each service, was later artificially divided for each services. This very bench in the case of Essar Project (India) Limited vs. CCE & ST, Rajkot [2014 (33) STR 696 (Tri. Ahmd.)], after relying upon the judgment of Apex Court in the case of UOI vs. Mahindra and Mahindra Limited [1995 (76) ELT ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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