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TMI Blog2016 (9) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... pay service tax under the Finance Act, 1994. Accordingly, the impugned order is set aside. - Aplication dsposed of - ST/3707/2012 - Final Order No 70604/2016 - Dated:- 7-6-2016 - Mr. Anil Choudhary, Member (Judicial) and Mr. Anil G. Shakkarwar, Member (Technical) Shri Puneet Bansal, Advocate Shri Prateek Jain, Advocate, for the Appellant(s) Shri Rajeev Ranjan, Joint Commissioner (AR) for the Department ORDER The appellant, M/s Barco Electronics Systems Pvt. Ltd., is in appeal against Order-in-Original No.18-/Commissioner/Noida/2012-13 dated 29.08.2012, passed Commissioner Central Excise, Customs and Service Tax, Noida, by which the claim of export of service had been denied, it was held that they have violated the provisions of the Act and Rules by not getting themselves registered under business auxiliary service and, further, the appellant failed to pay service tax on business auxiliary services by not declaring to the Revenue that they are receiving agency commission and accordingly have suppressed the facts from the Revenue and accordingly, a demand of ₹ 2,29,21,508/- was confirmed for the extended period 2006 -2011 along with interest and also pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ope of work is managing, coordinating and developing the entire sales in the area of competence. The sales can be done direct from the Buyer to the customers or via the BCD sales offices in India, The area of competence is: Indian region (including India, Bangladesh and Sri Lanka) In detail, the service consists in: Coordination between product base and dear/NO Direct sales by Buyer to end user Customer contact and lead follow-up Selling strategies according with PB strategies Discount policies according with PB strategies Sales coordination within the other regions for international projects Sales and profit result in the region Coordination with the non sales team with the BU Appendix 2 Price of services listed in appendix 1 The Supplier will charge the Buyer on the basis of a commission on sales The sales commission for the direct sales of the buyer to the end user is normally calculated on the difference between the buyer transfer price to India and the end user price. However, in practice, the end user price may fluctuate from project to project and many sometimes go below the Buyer transfer price to Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing penalty. The commission earned and remittance received is as follows:- S.N. Year (Rate of Service Tax) Commission Received Service Tax (Including cess) 1. 2006-2007 (12%) 28217588 3453833 2. 2007-08 (12%) 40222345 4971482 3. 2008-09 April, 2008 to 24.02.2009 (12%) 14731450 1820808 4. 24.02.2009 to 31.03.2009 (10%) 4660364 480017 5. 2009-10 (10%) 31510244 3245554 6. 2010-11 (10%) 86891417 8949814 Total 20,62,33,408 2,29,21,508 7. The appellant appeared and contested the show cause notice stating that they have provided the services to their foreign principal located outside India and the services so provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C.E., Chandigarh 2013 (29) S.T.R. 257 (Tri.-Del.) and also in Microsoft Corporation (I) (P) Ltd. vs. C.S.T., New Delhi :2014 (36) STR 766 (Tri.-Del.) wherein also by majority, it was held that whether the Indian subsidiary company have provided market development operations for foreign principal. It was business auxiliary services provided from India to a service recipient located outside India. Marketing operations in India were not at behest of any Indian customer or principal. Services were being provided under agreement to foreign recipient company to be used in their country and they may or may not result in any sales of product in Indian soil. Customer who paid for the impugned service in question of sales promotion was a foreign company and not person who bought its products in India, though he may also be a beneficiary of such service. Though, impugned service was for sale of product in India, they were export of services, not liable to be taxed in terms of Export of Service Rules, 2005, read with the Finance Act, 1994. 10. The Id. AR for the Revenue, relies on the impugned order. 11. Having considered the rival contentions, we find that the issue herein is squarely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time when such services are provided. 3. It is an accepted legal principle that the law has to be read harmoniously so as to avoid contradictions within a legislation. Keeping this principle in view, the meaning of the term 'used outside India' has to be understood in the context of the characteristics of a particular category of service as mentioned in sub-rule (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 in 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 Il 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 Ill [Rule 3(1)(iii)], the relevant factor is the location of the service receiver and not the pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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