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TMI Blog2023 (4) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be charged to service tax. This issue is clarified in the Board Circular No. 111/05/2009-ST in Para 2 and 3. Identical issue has been considered by this Tribunal in the case of YAMAZAKI MAZAK INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [ 2017 (8) TMI 1050 - CESTAT MUMBAI] wherein after considering various decisions, the Tribunal has held that services provided by the appellant classify as export of service - the service of the appellant in present case being absolutely identical, under the same set of facts, it amounts to Export of Service hence it is not liable to service tax. Accordingly, the demand on the Export of Service i.e. Business Auxiliary Service is not sustainable hence the same is set-aside. Commission paid to the foreign based agent towards the service of sales promotion and marketing received by the appellant - HELD THAT:- There is no dispute that the receipt of service from the service provider located outside India and the recipient of service is in India, the appellant is liable to pay service tax under reverse charge mechanism in terms of Section 66A of the Finance Act, 1994. The appellant up to 30.09.2009 paid service tax along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per Rule 3 of Export of Service Rules, 2005, the services which are described under sub-clause (zzb), fall under clause (iii) of Rule 3(1) of Export of Service Rules. He submits that only condition provided under Rule 3(1) to qualify the service as export of service is that the service is required only in relation to business or commerce, be provision of such service to recipient located outside India and when provided otherwise be provision of such service to a recipient located outside India at the time of provision of such service. Accordingly, the service being export of service would not liable to payment of service tax. He also relied on Board Circular No. 111/5/2009-ST dated 24.02.2009. He submits that this issue has already been decided in the following judgments:- (a) Evonik Specialty India Pvt. Limited - Final Order No. A/11778/2022 dated 20-11-2022 (b) Yamazaki Mazak India Pvt. Limited -2018 (12) GSTL 66 (Tri-Mumbai) (c) Pulcra Chemicals (India) Pvt. Limited -2015 (39) STR 700 (Tri.- Mumbai) (d) Wartsila India Limited- 2019 (24) G.S.T.L. 547 (Bom.) (e) Citi Bank N.A.- 2018 (18) G.S.T.L. 580 (Bom.) (f) Life Care Medical Systems - 2018 (18) G.S.T.L. 587 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice is received in India, service clearly falls under the category of Export of Service in terms of Rule 3(1) of Export of Service Rules, which is reproduced below:- Export of taxable service. 3. (1) Export of taxable services shall, in relation to taxable services (i) specified in sub-clauses (d), (m), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), (zzzh), (zzzr), (zzzy), (zzzz), (zzzza) (zzzzm) of clause (105) of section 65 of the Act, be provision of such services as are provided in relation to an immovable property situated outside India; (ii) specified in sub-clauses (a), (f), (h), (i), (j), (l), [* * *], (n), (o), [* * *], (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv),(zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), (zzzf), (zzzp), (zzzzg), (zzzzh), (zzzzi), (zzzzk) and (zzzzl) of clause (105) of section 65 of the Act, be provision of such services as are performed outside India: Provided that where such taxable service is partly performed outside India, it shall be treated as performed Outside India; [ Provided fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Ministry of External Affairs numbers S.O. 429(E), dated 18th July 1986 and S.O. 643(E), dated 19th September, 1996] From the above Rule 3(1) clause (iii), it can be seen that service being Business Auxiliary Service falling under sub-clause (zzb) of Section 65(105) of the Finance Act, 1994 is covered under clause (iii). There is no dispute that service of Promotion and Marketing was provided in relation to business or commerce and such service was received by the recipient located outside India. Therefore, the service is clearly covered under Export of Service Rules. Accordingly the same cannot be charged to service tax. This issue is clarified in the Board Circular No. 111/05/2009-ST in Para 2 and 3. Identical issue has been considered by this Tribunal in the case of Yamazaki Mazak India Pvt. Limited (supra) wherein after considering various decisions, the Tribunal has observed as follows:- 54 . In view of the above, the difference of opinion on various points is resolved as under : (i) That the Business Auxiliary Services of promotion of market in India for foreign principal made in terms of agreement dated 1-7-2005 amount to Export of Services and the Hon ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid service tax along with interest. As regard the balance service tax amount for the period 01.10.2009 onwards, the appellant claimed exemption Notification No. 18/2009-ST dated 07.07.2009. We find that exemption was denied only on the ground that the appellant have not mentioned invoice number in the shipping bills for export of goods. However, the use of input service received is meant for export of goods only. Except the lapse of not mentioning invoice number in the shipping bill, there is no other violation of notification. Merely for the small procedural lapse exemption cannot be denied as held in various decisions cited by the appellant. Therefore, we are of the view that the appellant is entitled for the exemption Notification No. 18/2009-ST dated 07.07.2009. 7. As regards the imposition of penalty, we find that since the appellant have admittedly paid service tax along with interest and moreover, they were otherwise entitled for the Cenvat credit for the service tax they have paid, in a routine course, no malafide intention can be attributed to the appellant, therefore invoking Section 80, in the facts and circumstance of the case, the penalty is not imposable accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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