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TMI Blog2015 (9) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and therefore the question of claiming the exemption for export of service simply did not arise. The appellants are well within their right to claim the exemption on account of export of service if their service was held taxable under ‘Management Consultant’ service. Extended period of limitation - Held that:- mere failure or negligence on the part of the assessee is not sufficient to sustain allegation of suppression and wilful mis-statement coupled with the appellants submissions in this regard, the allegation of suppression of facts is not sustainable, as a result of which demand is also hit by time bar. - demand set aside - Decided in favour of assessee. - Appeal No.ST/670/2009-CU[DB] - Final Order No.51464/2015 - Dated:- 27-2-2015 - G. Raghuram, President and Mr. R.K. Singh, Member (Technical), JJ. For the Petitioner : Shri Manish Gaur, Advocate For the Respondent : Shri AK Mishra, DR ORDER Per Mr. R.K. Singh : Appeal has been filed against Order-in-Original No.07/Comm/ST/2009, dated 15.05.2009 in terms of which service tax demand of ₹ 59,07,000/- along with interest and penalties for the period 01-04-2001 to 31-03-2005 has been confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and such services qualify as Export of Service in terms of Circular No.56/5/2003-ST, dated 25.04.2003 and Export of Service Rules, 2005. (v) The services rendered outside India were not liable to service tax. (vi) There has been no suppression or wilful mist-statement of facts and therefore, the demand is also time barred and (vii) The manner of calculation of tax liability was incorrect, 4. Ld. Departmental Representative, on the other hand, contented that the services rendered by the appellants are covered under the scope of Management Consultant Service, as defined under the Finance Act, 1994. as is evident from the description of services rendered in terms of the agreements entered into by the appellants with the service recipients abroad. 5. We have considered the contentions of both sides. We find that the Show Cause Notice merely stated that the appellants had received payments on account of royalty for use of their trade mark and that the use of trade mark falls under the category of Management Consultant taxable service , This view has been upheld by the adjudicating authority. The appellants have contended that the royalty for allowing us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts which are developed and marketed by Redrock through technical and R D support from Dabur and which are manufactured in accordance with the technical specifications detailed by Dabur. Consequently the services rendered as per the agreement between the appellant and M/s. Redrock qualify to be Management Consultant service as appellants clearly gets covered within the ambit of definition of Management Consultant quoted above in the wake of provisions of Section 65A(2) (b) ibid. We have perused the judgement of CESTAT in the case of M/s. Castrol Ltd. (supra) and find that the service rendered under the appellants agreement with M/s. Redrock are not only not identical to those covered in the said case but are also much wider in scope which makes the said judgement inapplicable here. 6. As regards service provided to M/s. DNPL, it is seen that as per the agreement entered into between them (i.e., M/s. DNPL and the appellants):- (i) DNPL shall be entitled to use the trade mark of Dabur for sale of product in Nepal, India and abroad for the duration of the said agreement, and (ii) Dabur will also assist in recruitment of specialised personnel and to train and impart informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on received is called royalty (equal to 6% of the FOB sales), the duties of the appellants clearly included the services which are covered under the scope of Management Consultant service. The appellants cited the case of Castrol Ltd. (supra) but the same is inapplicable here also precisely for reasons given in para 5 above. 8. The appellants have rightly claimed that the service was rendered in foreign countries; the payments therefor from M/s. Redrock, UK were received in foreign exchange. Thus the service rendered to M/s. Redrock would obviously get covered under the scope of Export of Service and hence would not be liable to service tax. Further as discussed above, the appellants did not charge M/s. DNPL for anything other than for allowing the use of trade mark and therefore there arises no tax liability under Management Consultant service. Regarding M/s. ACCL, Bangladesh, it was claimed that they have not received any payment at all. In absence of any payment from M/s. ACCL, Bangladesh the question of recovery of service tax does not arise. In the adjudication order, the adjudicating authority has inferred that the appellants claim that no amount against royalty had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and it was also a case of export of service. We are of the view that as is evident from the analysis above the issue does involve nuanced interpretation of definition of Management Consultant and therefore such a belief on the part of the appellants can scarcely be called unreasonable. Even the Show Cause Notice apparently suffered somewhat from an infirmity (even if possibly not fatal) in-as-much-as it alleged that use of trade mark fell under the category of Management Consultant service though it specifically got covered under Intellectual Property Service [Section 65 (55a)/(55b)] and in any case permitting use of trade mark on receipt of royalty was held to be not covered under Management Consultant service in the case of CCE, Jallandhar Vs. GNA Sons (supra). The Show Cause Notice has alleged suppression only on the ground that the appellants never registered themselves under Management Consultant service (para 7 of Show Cause Notice) and did not disclose that they were providing Management Consultancy on receipt of royalty for use of their trade mark . Given the nuanced interpretation involved, the infirmity of the Show Cause Notice indicated earlier and Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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