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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 ..... les of 2005. Accordingly, we hold that the appellant have exported the services in question and they are not liable to pay service tax under the Finance Act, 1994. Accordingly, the impugned order is set aside. - Aplication dsposed of X X X X Extracts X X X X X X X X Extracts X X X X ..... As a sales officer BCD the scope 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 India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 have been received outside India and consumed outside India. Accordingly, the service provided by them is the export of service and hence, they are not liable to service tax in India. It was also contended that under the provisions of Rule 3(1) of Export of Service Rules, 2005, they fulfilled all the conditions prescribed under Rule 3(1) and 3(2) as they are a person located in India and have provided services to a person located outside India, such services are for business and commerce, such services have been delivered outside India and used outside In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any 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 covered by the precedent ruling of this Tribunal in the case of Microsoft Corporation (I) (P) Ltd. (Supra). We also take notice of the fact of the C.B.E.C. Circular No. 111/5/2009-, S.T. dated 24-02-2009, the relevant portions which are quoted here below: "In terms of rule 3(2)(a) of the Export of Services Rules', 2005, a taxable service shall be treated as export of service if "such service is provided from India and used outside India". Instances have come to notice that certain activities, illustrations of which are given below, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;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 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 Ill services [Rule 3(1)(iii)], it is possible t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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