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TMI Blog2017 (3) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... endered by the appellants are squarely covered by the Export of Service Rules and there is no service tax liability on them. Reversal of CENVAT credit - Rule 6(3A) of CCR - Held that: - the value of exempted service was arrived at by the Original Authority as difference between sale price and cost of goods sold or 10% of the cost of goods sold whichever is more - in the absence of any other statutory formula to arrive at the quantum of Cenvat credit to be reversed on common input services, we find no impropriatory in the decision of the Original Authority in this regard - Regarding the contention of the Revenue that the appellant/assessee should not be allowed to utilize more than 20% of the total duty liability we note that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing activities. There are three issues on which the dispute arose. The first one is regarding service tax liability of the appellant/assessee under Business Auxiliary Service (BAS) on the commission received from foreign entities for services provided in relation to importation of goods in India. The second issue is relating to service tax liability under BAS for service fee received from foreign entities for services provided in relation to business of foreign entities. On both these issues a service tax demand of ₹ 11,54,25,700/- was confirmed by the Original Authority. The third issue is relating to reversal of credit to be made by the appellant/assessee on credit of input services used in relation or attributable to trading activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocated outside India. The payment should be received in convertible foreign exchange. Reference was made to Board Circular dated 24/02/2009 which clarified that services falling under Category III shall be considered to have been used outside India if the benefit of service accrues to a recipient outside India. The impugned order erred in holding that the services provided by the appellant/assessee do not qualify as export as the business promotion of the foreign entity is performed in India. The reliance placed on a interim stay order of the Tribunal in Microsoft Corporation (I) (P) Ltd. vs. CST, New Delhi reported in 2009 (15) S.T.R. 680 (Tri. Del.) is misplaced as final order in the said appeal is, in fact, in favour of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Explanation I (c) below Rule 6 (3D) of Cenvat Credit Rules, inserted vide Notification 13/2011 CE (NT) dated 31/03/2011. Though the appellant/assessee have certain reservations against the correctness of quantification made by the Original Authority they are not contesting this matter in their appeal. However, they are contesting the proposals made in the appeal filed by the Revenue against the quantification made by the Original Authority. Reliance was placed on the decision of Hon ble Bombay High Court in Mercedes Benz India Pvt. Ltd. vs. CCE, Pune I reported in 2016 (41) S.T.R. 577 (Bom.). 7. The learned AR reiterated the findings in the impugned order with reference to the tax liability of the appellant/assessee under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion tax in the sense that it is levied on commercial activities and it is not a charge on the business but a charge on the consumer. We note in the present case, the recipient of service are foreign entities and they are the consumers of these services provided by the appellant/assessee from India. The various persons in India to whom the goods were sold by the foreign entities or from whom various details and information were collected were not to be considered as recipient of service provided by the appellant/assessee. In Airbus Group India Pvt. Ltd. vs. CST, Delhi reported in 2016 TIOL 2312 CESTAT DEL ., the Tribunal after referring to the decisions in Paul Merchants Ltd. (supra), Microsoft Corporation (I) (P) Ltd. vs. CST, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Cenvat credit to be reversed by the appellant in terms of Rule 6 (3). Admittedly, the formula adopted by the Original Authority was not part of the provisions under Cenvat Credit Rules, 2004 during the material time. However, trading to be considered as exempted service is inserted by an explanation under Rule 2 (e) of Cenvat Credit Rules. The said insertion clearly states that it is for removal of doubts. Accordingly, in the absence of any other statutory formula to arrive at the quantum of Cenvat credit to be reversed on common input services, we find no impropriatory in the decision of the Original Authority in this regard. Regarding the contention of the Revenue that the appellant/assessee should not be allowed to utilize more than ..... X X X X Extracts X X X X X X X X Extracts X X X X
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