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TMI Blog2015 (9) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... le. Further, the appellant has also pleaded that such pre-deposit will erode the working capital of the company and if the amount is directed to be paid, it will seriously jeopardize the running business of the appellant, which is a travel agent, and, its business would almost come to a standstill. The order of ₹ 35 lakhs as pre-deposit ordered by the Tribunal is modified and the appellant is directed to deposit a sum of ₹ 15 lakhs. - Decided partly in favor of assessee. - C.M.A. No. 1293 of 2014 - - - Dated:- 22-8-2014 - R. Sudhakar and G.M. Akbar Ali, JJ. Shri Arvind P. Datar, SC, for S. Raghunathan, for the Appellant. Shri K. Sundareswaran, for the Respondent. JUDGMENT The present appeal has been preferred against, the Common Order Nos. 454 455/2010, dated 20-9-2010, passed by the 2nd respondent in Stay Application Nos. ST/S/206, 211/2010 in Appeal Nos. ST/354, 359/2010 [2011 (21) S.T.R. 61 (Tribunal)]. 2. The assessee has filed this appeal against the order of the Tribunal directing pre-deposit, contending that the conditions imposed by the Tribunal for the purpose of hearing of the appeal will defeat, the very purpose of pursuing the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent would be correct in directing pre-deposit of the amounts since SAA, who is the servicer receiver, is located outside India, the benefits accrue to SAA outside India, the agreement has been executed at Jeddah, Saudi Arabia, the appellant is required to obtain instructions only from SAA, Jeddah and consequently the hiring/order for the appellant s services has been made by SAA from Jeddah and hence the service has been provided from India and used outside India which would be export of services and hence not taxable. (vii) Whether the 2nd respondent would be correct in directing pre-deposit of amounts since the overriding commission for the services provided by the appellant both towards passenger sales and cargo sales, is by way of deductions made by the appellant, while remitting the sale proceeds to the overseas service recipient, viz., SAA and which deductions in the appellant s hands would be deemed to be in foreign currency and hence the service is to be treated as export of service under Rule 3(3) of the Export of Services Rules and hence exempted from Service Tax. (viii) Whether the 2nd respondent is justified in directing pre-deposit without considering the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal is concerned, it relates to the period 1-4-2007 to 31-3-2009. 7. The stand of the appellant is primarily based on the ground that there was no case of suppression stating that the show cause notice No. 336/2008, dated 22-2-2008 was issued and adjudicated and, the question of suppression will not arise in view of the earlier show cause notice No. 91/2006, dated 17-10-2006 and 215/2007 dated 23-10-2007, which were also adjudicated upon. Reliance was placed on the decision of the Supreme Court in Nizam Sugar Factory v. Collector of Central Excise [2006 (7) RC 598 = 2008 (9) S.T.R. 314 (S.C.) = 2006 (197) E.L.T. 465 (S.C.)], wherein it has been held that subsequent notice on suppression of same or similar facts cannot be issued if there is knowledge in the earlier proceedings. 8. On merits, it is the stand of the appellant that it is performing export service and, therefore, no Service Tax is payable under clause (105) of Section 65 of the Finance Act, 1994, for any such export services provided outside India, for which reliance is placed on the provisions of Rule 3 of Export of Services Rules, 2005 and Circular No. 111/05/2009-S.T., dated 24-2-2009. 9. That apart, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... movable property situated outside India? (ii) specified in sub-clauses (a), (f), (h), (i), (j), (l), (n), (o), (w), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zz), (zza), (zzc), (zzd), (zzf), (zzg), (zzi), (zzl), (zzm), (zzo), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), (zzzf), (zzzzg), (zzzzh), (zzzzi), (zzzzk), (zzzzl) and (zzzzo) of clause (105) of Section 65 of the Act, be provision of such services as are performed outside India : Provided that where such taxable service is partly performed outside India, it shall be treated as performed outside India : Provided further that where the taxable services referred to in sub-clauses (zzg), (zzh) and (zzi) of clause (105) of Section 65 of the Act, are provided in relation to any goods or material or any immovable property, as the case may be, situated outside India at the time of provision of service, through internet or an electronic network including a computer network or any other means, then such taxable service, whether or not performed outside India, shall be treated as the taxable service performed outside India :] (iii) specified in clause (105) of Section 65 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of Rule 3. For example, under Architect Service (a Category I service [Rule 3(1)(i)]), even if an Indian architect prepares a design sitting India for a property located in U.K. and hands it over to the owner of such property having his business and residence in India, it would have to be presumed that service has been used outside India. Similarly, if an Indian event, manager (a Category II service [Rule 3(1)(ii)] arranges a seminar for an Indian company in U.K., the service has to be treated to have been used outside India because the place of performance is U.K., even though the benefit of such a seminar may flow back to the employees serving the company in India. For the services that fall under Category III [Rule 3(1)(iii)], the relevant factor is the location of the servicer receiver and not the place of performance. In this context, the phrase used outside India is to be interpreted to mean that the benefit of the service should accrue outside India. Thus, for Category III services [Rule 3(1)(iii)], it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the appellant, which is a travel agent, and, its business would almost come to a standstill. 15. At this juncture, it is apposite to refer to a decision of the Supreme Court in Benara Valves Ltd. v. CCE - (2006) 13 SCC 347 = 2008 (12) S.T.R. 104 (S.C.) = 2006 (204) E.L.T. 513 (S.C.), wherein it has been held as under : 8. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no legs to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a licence to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnataka - (1993) 3 SCC 467 that under Indian conditions expression undue hardship is normally related to economic hardship. Undue which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. 13. For a hardship to be undue it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. 14. The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. 15. The other aspect relates to imposition of condition to safeguard the interests of the Revenue. This is an aspect which the Tribunal has to bring into focus. It is for the Tribunal to impose such conditions as are deemed proper to safeguard the interests of the Revenue. Therefore, the Tribunal while dealing with the application has to consider materials to be placed by the assessee relating to undue hardship and also to stipulate conditions as required to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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