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TMI Blog2019 (1) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... currencies. Therefore the appellants have fulfilled all the conditions of export of services as provided under Rule 3(1)(iii) of Export of Service rules. Tribunal in the case of Microsoft Corporation (I) Pvt. Ltd. [2014 (10) TMI 200 - CESTAT NEW DELHI (LB)] after considering various decisions of the High Court and the Supreme Court has come to the conclusion that the BAS 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. Appeal allowed - decided in favor of appellant. - ST/232/2009, ST/233/2009 - Final Order No. 20017-20018/2019 - Dated:- 1-1-2019 - MR. S.S GARG, JUDICIAL MEMBER And MR. P. ANJANI KUMAR, TECHNICAL MEMBER Shri Harish Bindu Madhavan, Advocate For the Appellant Dr. J. Harish, Dy. Commissioner(AR) For the Respondent ORDER Per: S.S GARG Appellants have filed these two appeals against the impugned orders dt. 15/12/2008 passed by the Commissioner whereby the Commissioner has confirmed the demands along with interest and imposed penalties under Sections 76 and 78. Since the issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zero duty customers identified by M/s. Tata IBM for this purpose. They undertook to identify specified zero duty customers in India, complete the documentation of sales agreements and submit the same to IBM USA for acceptance. In consideration of the marketing services rendered, M/s. Tata IBM were paid a commission or fee equal to difference between the prices at which products are invoiced by IBM pursuant here to, duly adjusted for insurance, freight etc. wherever necessary, and the normal price at which M/s. Tata IBM is entitled to buy such products from IBM. The agreement further provided for identifying the parties to the agreement against any third party claims. The services provided by IBM India therefore appeared to have been provided and consumed within India insofar as, promotion of sales, marketing of IBM products is concerned. It appeared that IBM India failed to discharge service tax on such fee / commission received from IBM USA under the taxable category of BAS. Thereafter, after scrutiny of ST3 returns and other documents filed by the appellant, the Department issued the show-cause notice demanding the duty of ₹ 15,11,26,201/- along with interest and penalty. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Service Rules, 2005. He also relied upon the Board's Circular No. 111/05/2009-ST dt. 24/02/2009 wherein the meaning of the phrase used outside India has been clarified in relation to different categories of taxable services. The relevant portion of the circular is extracted below:- Indian agents who undertake marketing in India of goods of a foreign seller. In this case, the agent undertakes all activities within India and receives commission for his services from foreign seller in convertible foreign exchange. . For the services that fall under Category III [Rule 3(I) (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 III services [Rule 3(I)(iii)], it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside India. In all the illustrations mentioned in the opening paragraph, what is accruing outside India is the benefit in terms of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute as to the fact that the appellant is rendering the services such as selling, obtaining orders, providing the market support to identify and promote the products of M/s IBM World Trade Corporation(parent concern) it is undisputed that these services are provided in India and hence it is the case of the Revenue that the sales commission received are chargeable for service tax liability. In our considered view this issue is also now settled by a majority order of the Tribunal in the case of Microsoft Corporation(I)(P)(Ltd) (supra). The same view has been expressed by following decisions of this Tribunal: 1) Paul Merchants Ltd [2012-TIOL-1877-CESTAT-DELJ 2) Gap International Sourcing (India) Pvt Ltd [2014-TIOL-465-CESTAT-Del] 3) Blue Star Ltd Vs CCE Bangalore [2008-TIOL-716-CESTAT-BANG] 4) ABS India Ltd Vs CST Bangalore [2008(17) STT 223 (Tri-Bang)] 5) Lenovo India Pvt Ltd Vs CST Bangalore [2009-TIOL-911-CESTAT-Bang)] 6) IBM India (P) Ltd Vs CCE, Bangalore [2010-TIOL-154-CESTAT-Bang] 7) National Engineering Industries Ltd Vs CCE Jaipur [2008-TIOL-939-CESTAT-DEL] In view of the fact that the issue is now settled in favour of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner has not given any findings on the BTO services (Business Process Outsourcing and call centre services) which also qualifies as export of service, though the show-cause notice was issued for BTO services and marketing sales promotion services under the BAS. Further we find that the BTO services also qualifies as export of services in view of the decision cited supra. 6.4. Further we find that the Hon'ble High Court of Delhi in the case of Verizon Communication India Pvt. Ltd. cited supra has considered various circulars issued from time to time by the CBEC and also considered various decisions of the Tribunal and the High Court and has come to the conclusion that the assessee is not liable to pay service tax as the service rendered by them fall under the definition of export of service. It is pertinent to reproduce para 50 to 53 of the said decision, which is reproduced below: - 50. The decision of Larger Bench of CESTAT in Paul Merchants Ltd. v. CCE, Chandigarh (supra) may be referred to at this stage. The period with which the dispute in that case related to was between 1st July, 2003 and 30th June, 2007. It involved, therefore, the interpretation of the ESR, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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