9911796707
TMI Blog2019 (1) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009 are taken for discussion and decision. 2. The appellants are engaged in providing taxable service under the category of Business Auxiliary Service (BAS) defined under Section 65(19) of the Finance Act, 1994. The assessee had entered into an agreement with M/S. IBM World Trade Corporation, USA (hereinafter referred to as IBM, USA) in terms of which they were appointed as IBM USA's Business Partner in India for the purpose of marketing selected IBM products in the territory of India. The agreement stipulated payment of commission to the assessee in freely convertible foreign currency in consideration of the marketing / sales promotion services provided in India. As per the agreement for marketing support entered with IBM, USA, the assessee undertook various activities viz. promotion / marketing / sales / procurement of orders and provide marketing support to identify and promote the products of IBM, USA in India. These services provided by the assessee to IBM, USA appeared to be correctly classifiable under BAS covered under Section 65(19) of the Act, 1994, which is taxable with effect from 01/07/2003. M/s. Tata IBM, India were appointed as an IBM Business Partner in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law. He further submitted that the issue involved in the present case has been considered by various Benches of the Tribunal and it has been consistently held that the services provided by the appellant are export of service. He further submitted that during the relevant period, the appellant satisfied the following conditions so as to make their service as export of service. i. Services provided by the appellant are in relation to commerce or industry. ii. The service recipient i.e. IBM USA is located outside India; iii. The consideration for rendering the sale promotion activities is received in convertible foreign exchange; iv. Such services have been delivered and used outside India based on the following reasons;-the .... appellant promotes products of IBM USA by identifying specified customers for IBM products in India. .... Based on identification of customers, appellant would get potential orders for IBM USA's products. .... Such orders are forwarded to IBM USA for its consideration. .... IBM USA would analyse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand, the learned AR reiterated the findings of the impugned order and submitted that the Commissioner has rightly decided that the services of marketing the products of the foreign company in India is not a export of service as the service is performed in India. 6.1. After considering the submissions of both the parties and perusal of the material on record, we find that admittedly the appellants are providing the services to their foreign company situated outside India and their parent company does not have any commercial or industrial establishment or any office in India and the services by appellant are provided in relation to provision of service recipient i.e. IBM WTC. Further we find that the appellant satisfied all the conditions that are required under the Export of Service Rules, 2005. Further we find that there is no condition under Export of Service Rules, 2005 that the services performed in India would not qualify as export of service. The rules only provide that recipient of service should be situated outside India and thus specifically acknowledges that export of service can be provided in India. Further the sales commission was received in India in freely co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. [2014-TIOL-465-CESTAT-Del]. Vide its detailed order and after considering the various decisions of the higher Court as also various circulars issued by the Board, it stand held that services of identifying the Indian customers, for procurement of various goods on behest of foreign entity is the service provided by a foreign entity and such service provided by a person in India is consumed and used by a person abroad. It has to be treated as export of services. I also take note of the Tribunal's decision in the case of Vodafone Essar Cellular Ltd. v. CCE, Pune [2013-TIOL-566-CESTAT-Mum = 2013 (31) S.T.R. 738 (T)] wherein it stand held that when the services is rendered to third party at the behest of the assessees' customers, the service recipient is assessees' customer and not the third party i.e. his customer's customer. As such, the services being provided at the behest of the foreign telecommunication services provided to a person, roaming India were held to be constituting export services under the Export of Services Rules, 2005. The said decision stand subsequently followed by the Tribunal in the case of CESTAT, Mumbai v. Bayer Material Science Pvt. Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT in Paul Merchants Ltd. v. CCE, Chandigarh (supra) is right in holding that "The service recipient is the person on whose instructions/orders the service is provided who is obliged to make the payment from the same and whose need is satisfied by the provision of the service." The Court further affirms the following passage in the said judgment in Paul Merchants Ltd. v. CCE, Chandigarh (supra) which correctly explains the legal position : "It is the person who requested for the service is liable to make payment for the same and whose need is satisfied by the provision of service who has to be treated as recipient of the service, not the person or persons affected by the performance of the service. Thus, when the person on whose instructions the services in question had been provided by the agents/ sub-agents in India, who is liable to make payment for these services and who used the service for his business, is located abroad, the destination of the services in question has to be treated abroad. The destination has to be decided on the basis of the place of consumption, not the place of performance of Service." 52. In Vodafone Essar Cellular Ltd. v. CCE (supra), the CESTAT exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
