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TMI Blog2018 (2) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant. Programme producer service with reference to domestic radio stations to whom the appellant gave various programmes for broadcasting - Held that: - a plain reading of the statutory definition for programme producer service makes it clear that such programme producer should produce programmes on behalf of another person - In the present case, the appellants did not produce programmes for another person. There is no second person at the time of appellant producing the programme which is apparently for self - such transactions are not covered by programme producer service as the appellant did not produce programme for a third party. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No.53286 of 2014 - Final Order No.58649/2017 - Dated:- 14-12-2017 - Shri S.K. Mohanty and Shri B. Ravichandran, JJ. For The Appellant : Shri Tarun Gulati, Anupam Mishra and Sparsh Bhargava, Advocates For The Respondent : Shri Amresh Jain, Authorized Representative (DR) Per. B. Ravichandran :- The appellant is aggrieved by the order dated 20/03/2014 of Commissioner of Service Tax (Adjudication), New Delhi. The appellant is engaged in broadcasting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawing the attention to Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000 and Foreign Exchange Manager (Realization, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 and also RBI guide to authorized dealers issued on 2005 it is submitted that the method of realization of export proceeds has been recognized by the Competent Authorities in India and the credit of Indian rupee into the appellant s account is attributable to pound sterling paid by BBC UK which was settled through nostro account between the participated banks ; (d) the Original Authority has also recognized that the amount of ₹ 39 crores has been credited to the appellant s account which are attributable to exports now in question. The only point disputed is that the amount credited to the appellant account is Indian rupees and received as Indian rupees. It is the submission of the appellant that any amount credited to Indian recipient for the account maintained Indian bank can be only in Indian rupee if the person is not having specific foreign exchange account. Such remittance are regularly recognized as fulfillment of receipt of non-convertible foreign exchange ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could have been handled and transferred only by an authorized dealer. In the present case Lloyd Bank, UK Branch, is not recognized as authorized dealer by the RBI. Further Standard Chartered Bank though may have been an authorized dealer, in the particular case did not act as such dealer as they have not dealt with foreign exchange per-se. They only credited Indian rupee as received from UK in the appellant s account. He submitted that the foreign exchange should be received in India which in essence is for addition of foreign exchange reserve for Indian Government. In the absence of such receipt the condition of export cannot be said to have been fulfilled. 4. On the second issue he reiterated the findings of the Original Authority. 5. We have heard both the sides and perused the appeal record. On the first point regarding whether or not appellant received consideration for exported service in convertible foreign exchange, we note that a total amount of about ₹ 39 crores is credited to the account of the appellant maintained with Standard Chartered Bank, Gurgaon. This money is attributable to the export is not in dispute. The question is whether this money is accounte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate . Clause 3A.6(i) of the Exchange Control Manual is reproduced below : 3A.6 (i) Authorised dealers should issue certificates in form BCI against receipt of inward remittances or realisation of foreign exchange on security paper if the amount exceeds ₹ 15,000/- in value, bearing distinctive serial numbers and reference numbers. In case the amount of inward remittance or realisation of foreign exchange is upto ₹ 15,000/- certificates in form BCI with serial numbers and reference numbers may be issued on the letter-head of the authorised dealer (with their Logo printed on it). Since inward remittances received for opening of or credit of Non- Resident (External) accounts/FCNR accounts can be repatriated freely, authorised dealers should not issue certificates against such remittances. 6. From the above provision it is clear that Foreign Inward Remittance Certificate (FIRC) is issued only in respect of foreign exchange. In the present case, FIRCs were issued and there is a specific certification that the payment has not been received in non-convertible rupees, which establishes that the payment received and mentioned in the FIRCs are other than non-convertibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kistan and Sri Lanka (a) payment for all eligible current transactions by debit to the Asian Clearing Union dollar account in India of a bank of the member country in which the other party to the transaction is resident or by credit to the Asian Clearing Union dollar account of the authorised dealer maintained with the correspondent bank in the member country; and (b) payment in any permitted currency in all other cases (2) all countries other than those mentioned in (1). (a) payment in rupees from the account of a bank situated in any country other than a member country of Asian Clearing Union or Nepal or Bhutan; or (b) payment in any permitted currency (2) In respect of an export from India, payment shall be received in a currency appropriate to the place of final destination as mentioned in the declaration form irrespective of the country of residence of the buyer. 7. From the above regulation and serial No. (2) of the Table, it is very clear that the payment in rupees from the account of a bank situated in any country (other t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreements of the appellant with M/s Sedgwick offshore Resources Ltd. London for the purposes of Section 80-0 of the Income-tax Act, are improper and illegal. We declare so. we direct the respondent to process the agreements in the light of the principles laid down by us herein above. The appeal is allowed. There shall be no order as to costs. 9. From the above judgment it is observed that out of the total payment to be made by the insurance broker in India to the foreign insurer was reduced to the extent of his brokerage and remaining amount was remitted to foreign insurer in the foreign exchange. The issue was whether the brokerage in Indian rupees retained by the Indian Insurance broker shall be treated as foreign exchange or otherwise. The Hon ble Supreme Court has held that the said amount of brokerage retained by the Indian insurance broker from the total amount due to the foreign insurer shall be treated as foreign exchange. In view of the above judgment, I am of the view that when a foreign bank is maintaining Indian rupees in their account obviously, such Indian rupees was obtained in lieu of foreign exchange. For example, if any payment is made from India to any for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency is required to be submitted irrespective of number of accounts operated upon in that currency . 10. One more important aspect to be noted here is that the receipt of consideration for the disputed services is admitted. However, the source of amount is questioned by Revenue. It is manifestly clear that the amount credited to the account of the appellant in India is in consequence of a debit of pound sterling account maintained by participated bank in nostro mechanism in UK. The said debit of foreign exchange by the UK bank and consequent credit in Indian rupee in Indian bank as part of nostro transaction is reported to RBI and necessarily forms part of foreign exchange earning in India. In other words, the amount has not reached India from UK in Indian rupees. 11. In view of the detailed analysis, as above and decided cases in similar set of facts, we find no merit in the findings by the lower authority to the effect that foreign exchange has not been received in convertible foreign currency for export of services by the appellant. 12. On the second issue, a plain reading of the statutory definition for programme producer service makes it clear that such programme prod ..... X X X X Extracts X X X X X X X X Extracts X X X X
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