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TMI Blog2018 (1) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable? (ii) Whether the reimbursement received in relation to Product Support Services (PSS) rendered by the Appellant is not taxable for the period from 09.07.2004 to 31.03.2005? (iii) Whether certain foreign currency expenditure incurred by the Appellant from April 2006 till March 2009 is not taxable under the Act? The issue wise details of various show cause notices are as under:- Sr. No. Issue Date of Show Cause Notice Period Amount (Rs.) 1. Marketing Support Services (MSS) - Export status 23.10.2009 15.03.05 to 31.03.06 01.01.08 to 31.03.09 143,81,89,365/- 4.10.2010 01.04.09 to 31.03.10 63,11,63,071/- 2. Reimbursement in relation to MSS 23.10.2009 01.04.06 to 31.03.08 26,64,23,722/- 4.10.2010 01.04.08 to 31.03.09 10,02,24,599/- Corrigendum Dt. 31.05.2013 01.04.08 to 31.03.09 6,45,86,338* 3. Reimbursement in relation to Product Support Services (PSS) 23.10.2009 09.07.04 to 31.03.05 11,27,480/- 4. Service tax on forex expenditure 23.10.2009 01.04.06 to 31.03.09 65,52,957/- Total amount in dispute 2,50,82,67,532 *Additional demand raised by corrigendum. 2. The facts leading to the sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces should also form a part of the taxable value. However, by not paying the service tax on the reimbursement received by the assessee, it appeared that the appellants had contravened the provisions of Finance Act, 1994 and Determination of Value Rules, 2006. 6. The assessee vide its dated 07.01.2009 supplied details for the period 2003-04 & 2004-05 for reimbursements received from overseas in relation to PSS. In reply, the assessee had shown an amount of Rs. 1,54,80,268.00 as non taxable against reimbursement under PSS. Vide letter dated 06.12.2008, the assessee informed that they have discharged their service tax liability on this account for the period 2005-06 and 2006-07 and they continued to pay thereafter. The income under PSS which pertain to maintenance of Repair Services". These services were exempted from payment of service tax vide Notification No.21/2003-ST dated 20.06.2003, however, the said notification was withdrawn vide Notification No.7/2004-ST dated 09.07.04. Revenue felt that the assessee was liable to pay service tax during the period 09.07.2004 to 31.03.2005. The proportionate amount of taxable value worked out Rs. 1,16,10,201.00. Service tax on this amount is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Aggrieved from the same, the appellants have filed this appeal. 9. Ld. Advocate for the appellants submitted that the MSS provided by the appellants to the Microsoft Singapore qualifies as export of service as has been held by the Larger Bench in the appellant's own case in Microsoft Corporation India Pvt. Ltd. Vs. CST - 2014 (36) STR 766. He stated that the period covered in the earlier show cause notice dt. 24.04.2008, which was the subject matter of the above mentioned Larger Bench judgment regarding MSS was 19.04.2006 to 31.12.2007. He mentioned that the Larger Bench has held that the Customer for MSS provided by the appellants is Microsoft Singapore and the benefit of the service has accrued outside India to Microsoft Singapore. In view of the same he argued that the MSS, which is Business Auxiliary Service rendered to Microsoft Singapore, would amount export of services. He contended that the issue stands squarely covered in their favour for the relevant period i.e. 15.03.2005 to 31.03.2006, 01.01.2008 to 31.03.2009 and 01.04.2009 to 31.03.2010 (in respect of MSS), and 01.04.2006 to 31.03.2008 and 01.04.2008 to 31.03.2009 (in respect of reimbursements in relation to MS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on the same kind of expenses for the period 2009-2010 and 2010-2011 has been dropped by the Commissioner accepting the explanation provided by the appellants. The appellant continued in the same business throughout disputed period and most of the expenses are of recurring nature. Hence, it was contended that these expenses for April, 2006 to March, 2009 should also covered by the explanation given by the appellant for the subsequent period, which has been accepted by the Department. He further submitted that neither the show cause notice nor the impugned order proposes any specific classification or sets out a charge against the Appellant to demand and confirm Service Tax on the foreign currency expenditure. He relied on the following case laws:- a) CCE, Nagpur Vs. Ballarpur Industries Ltd. - 2007 (215) ELT 489 (SC). b) CCE, Bangalore Vs. Brindavan Beverages Pvt. Ltd. - 2007 (213) ELT 487) (SC). It was also submitted that no specific taxable category has been specified in the show cause notice. Hence no Service Tax can be levied on it. The Department has therefore failed to discharge its burden as to the taxable category in which activity of the assessee falls. He relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re but that does not mean that services have been used outside India. 52.16 The notice has also given example of Call Centres/ B.P.Os where, according to the Noticee, the services are being considered as export on the ground that these are being provided to the recipients located abroad. The Noticee has, however, failed to cite any decided case law or adduce any other evidence, which could form the basis of coming to the conclusion that either the services of Call Centres/BPOs are comparable to the services rendered by them or whether, if such a practice at all exists at some lever, it has attained legal finality or precedential value for the determination of this case. Likewise, comparison made under Foreign Trade Development & Regulation Act, 1992 in respect of export of goods are of no avail as the export of goods is an entirely different matter governed by the law specified elsewhere. 52.17 The Noticee has relied on a number of judgments of which I must make a mention of the judgment in the case of Hon'ble Tribunal in M/s Blue Star Ltd. Vs. CCE, Bangalore, 2008-TIOL-716-CESTAT-Bang. Varuna Sulphonators Vs. UOI 1993 (68) ELT 42 (Allahabad) and Paul Merchants ltd. & Others Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Export of Services Rules, 2005 and not liable to service tax. 50. In a recent decision the Tribunal in the case of Larsen & Toubro [Misc. order No.59225-59226/13 dated 09.09.2013] held that a majority decision is Larger Bench decision having the same binding criteria as that of Larger Bench. If that be so, the majority decision in the case of Paul Merchant is required to be followed. 51. Even otherwise also, I find that the disputed service is the service being provided by the appellant to his principal located in Singapore. The marketing operations done by the appellant in India cannot be said to be at the behest of any Indian customer. The service being provided may or may not result in any sales of the product in Indian soil. The transactions and activities between the appellant and Singapore principal company are the disputed activities. As such, the services are being provided by the appellant to Singapore Recipient company and to be used by them at Singapore, may be for the purpose of the sale of their product in India, have to be held as export of services. 52. Apart from the above, we note that there was identical issue was before the Bench of the Tribunal in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also Burmah Shell Oil Storage and Distributing Co. of India Ltd. Vs. Commercial Tax Officers [1960 (11) STC 764] = 2002-TIOL-966-Sc-CT-CB explaining the meaning of export is not relevant inasmuch as the same deals with the export of goods and not export of services; (ii) That the Business Auxiliary services provided by the assessee to their Singapore parent company was delivered outside India as such was used there and is covered by the provisions of Export of Service Rules and are not liable to Service Tax. xxx xxx xxx" 14. Accordingly, by following the Larger Bench decision in the appellant's own case cited above (Final Order No.ST/A/53737/2014-Cus (DB), which has been decided in their favour holding that such services provided to M/s Microsoft Operations P. Ltd. Singapore, amount to export of services and hence are not liable to service tax, we hold that the services being provided by appellants satisfy the conditions of Export of Service Rules, 2005, hence are not liable to service tax. 15. The second issue relates to the reimbursement received on account of services claimed as exported under the category of Business Auxiliary Services. The demand confirmed on this accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e portion of foreign currency expenditure. The Ld. Commissioner (A) has observed that for the impugned period, the noticee has not given any cogent explanation/details of the foreign currency expenditure as they gave for the period 2009-2010 & 2010-2011. In their submissions before this Tribunal, the ld. Advocate has submitted that the respondent has not mentioned the relevant taxable category under Section 65(105) of the Act for demanding the service tax. Besides, the appellants also claim that they have time and again clarified to the audit/adjudicating authority about expenditure in foreign currency. In this regard, he drew attention to their letters dated 18.11.2008 and their letter dated 16.10.2009 & 7.10.2009 by which the relevant information was provided by the appellant to the department. However, the fact remains that the Ld. Commissioner has given no findings at all on the above demand in the impugned order and it would be in the interest of justice that the supporting evidence for the impugned period are submitted before the adjudicating authority, who will carefully examine the evidence in respect of this particular demand and given his findings and conclusion on the ev ..... 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