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TMI Blog2018 (7) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... for which the appellant even has received certain consideration - Held that:- Every intention and purpose of the agreement of appellant with WMIL is centred to market the product of affiliate and sale thereof for which the promotion and marketing activities are centered essentially to be carried out without which business of WMIL could not sustain. Such activities are essentially being envisaged under Business Auxiliary Services - The impugned order has rightly considered the agreement of appellant with WMIL as an agreement for providing Business Auxiliary Services - demand upheld. Agreement with WGS for promoting the products of WGS in the markets in India - WGS is an entity based outside India - Held that:- Though the appellant were providing marketing and promotional services to them but the recipient being abroad, the appellant were receiving remuneration in convertible foreign exchange from WGS - There has been a Notification No. 6/99 dated 09.04.1999 providing exemption to taxable services where consideration was received in convertible foreign exchange. Though this exemption was withdrawn vide another Notification No. 2/2003-ST w.e.f. 01.03.2003, but subsequently vide No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y appellant under the said agreement/arrangement for the period w.e.f. July, 2003 to March, 2006 amounting to ₹ 1,71,53,164/- is taxable being amounting to Business Auxiliary Services (BAS) provided by the appellant to GDPL. b) Agreement dated 16.02.2001 with M/s White Mackay (India) Ltd., New Delhi (WMIL) for providing marketing services to them and also for sale of IMFL manufactured by WMIL or procured by them from other manufacturers. The Department has alleged that the services as provided by the appellant to WMIL under this Agreement for the period w.e.f. July, 2003 to June, 2004 amounting to ₹ 33,46,259/- is liable for service tax on account of it being the Business Auxiliary Services, being rendered by appellant to WMIL. c) Contract dated 16.02.2006 with M/s William Grant Sons International Ltd., Hongkong (WGS) for promoting the products of WGS in the markets in India for which appellant received remuneration in convertible foreign exchange from WGS. The Department has alleged the said services being provided for the period w.e.f. July, 2003 to December, 2003 amounting to ₹ 7,77,404/- as the amount of service tax for the services being the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istributors abroad and they were receiving the payments in foreign currency. Service charges so received are exempted from the liability of service tax vide a Circular dated 25.04.2003. Finally, relying upon a voluminous case law with maximum emphasis on Redico Khaitan Ltd. vs. Commissioner of Service Tax, Delhi 2016 (44) STR 133 (Tri. Del.), the appellant has prayed for the impugned order to be set aside and Appeal to be allowed. 8. While rebutting these arguments, it is submitted by the Ld. DR that the appellant s own agreement falsify all assertions of the appellant. Clause 5.2 of the agreement with GDPL specifically mentions that the appellant shall be providing brand management in respect of the products and market the product in accordance with the requirements of the market place. Further, Clause 6.2 has been impressed upon where GDPL was agreed to raise the invoice to the appellant, whereby the appellant was made responsible for collection of all payments against such invoices raise by GDPL. It is submitted that as per the definition of Business Auxiliary Service Sub-Clause vii includes the activity of collection of payments as such the services provided by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tling activity is to the account of the appellant. GDPL has undertaken bottling of IMFL products of Bacardi brand which is owned by Baco abroad and for Indian territory it is the product of the appellant. Resultantly, what appears from this contractual arrangement is that the GDPL is providing service to the appellant while manufacturing the product under the brand name of the appellant. While providing any technical know-how, the specifications, marketing strategies and even providing promotional services to GDPL, appellant is actually providing those services to sell, the product marketed being the product of the appellant itself. GDPL is merely a Contract Bottling Unit (CBU). The relevant decision in this respect is of Redico Khaitan Ltd.(supra) and also BDA Pvt. Ltd vs CCE 2015 (40) STR 352 (Tri.- Del.) which has been affirmed by Hon ble Supreme Court in Commissioner vs BDA Pvt. Ltd 2016 (42) STR J 143 (S.C.) wherein it was held that under the contract bottling arrangement falling in the alcoholic industry, the bottler is providing services to the principal manufacturer/ the brand owner and that the fee received whether in the form of surplus/profit by the principal manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption to taxable services where consideration was received in convertible foreign exchange. Though this exemption was withdrawn vide another Notification No. 2/2003-ST w.e.f. 01.03.2003, but subsequently vide Notification No. 21/2003 ST dated 20.11.2003, the exemption was restored. The Adjudicating Authority has declined this exemption to the appellant solely on the ground that there was no exemption on the taxable services received in convertible foreign exchange was available for a period w.e.f. 01.03.2003 to 20.11.2003 which includes the impugned period. But the Adjudicating Authority has ignored the CBEC Circular No. 56/5/2003 ST dated 25.04.2003, vide which it was clarified that the service tax is consumption based tax and it is not applicable on export of services. Export of services would continue to remain tax free even after withdrawal of Notification No. 6/99 dated 09.04.1999. The Hon ble Supreme Court in the case WPIL vs CCE 2005 (181) ELT 359 (S.C.) has held that in case an exemption is withdrawn and again reinstated and during the interim period, there is no change in the policy of the Government, then the later Notification reinstating the exemption is mere cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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