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TMI Blog2020 (12) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to be examined by the Commissioner afresh. For this purpose, it shall be open to the appellant to submit a representation with factual aspect and supporting documents before the Commissioner within a period of six weeks from today. The Principal Commissioner shall thereafter take a decision within a period of three months, without being influenced by any of the observation made in this order - matter on remand. Appeal allowed in part and part matter on remand. - Service Tax Appeal No. 51772 of 2014 - FINAL ORDER No. 51639/2020 - Dated:- 17-12-2020 - MR. DILIP GUPTA, PRESIDENT AND MR. P ANJANI KUMAR, MEMBER (TECHNICAL) Shri B.L. Narasimhan, Shri Kunal Aggarwal and Ms. Shagun Arora, Advocates for the Appellant Shri K. Poddar, Authorized Representatives for the Respondent ORDER This appeal has been filed for setting aside the order dated December 11, 2013 passed by the Commissioner of Central Excise, Meerut [ the Commissioner ], by which certain demand raised in the show cause notice dated October 11, 2012 for the period from April 1, 2007 to March 31, 2011, have been confirmed and certain demands have been dropped. 2. The issue involved in this ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner partly confirmed and partly dropped the demands, by order dated December 11, 2013. Details of the demands are contained in the following Table. Sl. No. Category of Demand Transaction Quantum of Service Tax Findings of the OIO 1. Commission on Sale - ₹ 43,466 Dropped as service tax had been paid. 2. Export Incentives Relates to income from sale of DEPB licenses ₹ 1,06,77,889 Dropped as not taxable 3. Foreign Commission Service charge Services rendered to foreign companies. Services rendered to Global in respect of supply of personnel. ₹ 46,61,774/- confirmed (partially dropped for the period after 27.02.2010 and extending cum-tax benefit) Demand partially Confirmed 4. Miscellaneous Income Rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s recorded in the impugned order are clearly contrary to the principles laid down in various decisions that promotion and marketing of goods of foreign companies in India would qualify as export of service under the 2005 Rules; (ii) The Commissioner has misread the Circular dated May 13, 2011 in as much as the said Circular provides that services would be used outside India if a benefit of such service accrues outside India and accrual of benefit should be tested beyond the factor of the person who pays for such service; (iii) The promotional and marketing services of goods of foreign companies would ultimately result in increase in business and revenue of such foreign companies. Hence, even by virtue of the Circular dated May 13, 2011, service rendered by the appellant would qualify as export; (iv) The 2005 Rules were amended w.e.f February 27, 2012 and the condition such service is provided from India and used outside India was deleted from Rule 3(2) of the 2005 Rules. Thus, for the period 2010-11, the only requirement is that the service recipient should be situated outside India and consideration is received in foreign currency. Since both the conditions have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not satisfy the condition of requiring the services to be used outside India and in this connection, the Commissioner placed reliance upon the Circular dated May 13, 2011. Thus, the demand has been confirmed on the premise that the appellant was rendering services in relation to promotion of goods in India (including procurement of orders; collection of payment, etc.), and therefore, the services were being provided and used in India . On this basis, the transactions have been held to not qualify as export of services in terms of rule 3(2) of the 2005 Rules. 22. It would be seen from the aforesaid factual position stated by the appellant in reply to the show cause notice that the appellant had been representing various foreign companies in India and these foreign companies did not have any business or any other office in India. The appellant promoted the business of such foreign companies in India and as a consideration for this service, received commission from the foreign companies in convertible foreign exchange. In fact, the appellant has also described the manner in which it had promoted the business of such foreign companies. The appellant has stated that it procured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmunication India Private Limited vs. Assistant Commissioner of Service Tax, Delhi [2018(8) GSTL 32(Delhi)]; 17. Thus, for the reasons stated above and in Involute Engineering, it is not possible to sustain the demand confirmed by the Commissioner in regard to this commission received from the foreign companies. 18. The Commissioner has confirmed demand of ₹ 6,75,403/- on commission paid by the appellant to foreign agents during the period from Financial Year 2008-09 to Financial Year 2010-11. It has been submitted by learned counsel for the appellant that this demand is not sustainable for the reasons stated in the following Table. Year Taxable value Amount confirmed Amount deposited Balance Comments 2007-08 0 0 0 0 - 2008-09 ₹ 25,52,026 ₹ 3,15,430 ₹ 2,45,430 plus interest of Rs, 9,817 deposited on 20.07.2009 (Annexure-7) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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