9911796707
TMI Blog2023 (12) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 73 of the Finance Act, 1994 Interest Under Section 75 of the Finance Act, 1994 Penalty Rs. 200 per day or 2% of tax per month whichever is higher under Section 76 of the Finance Act, 1994 Rs. 20,000/- under Section 77 of the Finance Act, 1994 Rs. 7,00,00,000/- under Section 78 of the Finance Act, 1994 2. Briefly the facts of the present case are that the appellant is wholly owned subsidiary of Carrier Corporation, USA and is engaged in manufacturing, selling and distribution of various types of air-conditioning and refrigeration equipment. In the course of its business, the appellant receives queries from various customers for products which are not manufactured by the appellant but are manufactured by other overseas entities of Carrier group outside India. Such enquiries were forwarded by the appellant to the overseas entities of the Carrier Group. After such queries are passed on to the overseas entities, they entered into negotiations with the customers in terms of the product delivery, the price terms etc. and if the deal between the overseas entities and the Indian customers are materialized, the overseas entity entered into a contract with the customer dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has been providing business development services relating to refrigeration equipment and products to customers of Carrier, Overseas, in consideration of the commission received in convertible foreign currency and the said services qualify as 'BAS' under Section 65(19) of the Finance Act and accordingly, covered under Rule 3(1)(iii) of the Export of Service Rules. She further submits that for the services falling under Rule 3(1)(iii) should be seen qua the person receiving the services and not the place of performance of the service. She also submits that in the agreement with Carrier China (copy of which annexed with the Appeal Memo), it can be seen that the services are received by Carrier China which is located outside India but the consideration is received by the Appellant in India from Carrier China in foreign exchange and the agreement for rendering the services is between Carrier China and the Appellant and not with the end users of the services i.e., the customers of Carrier China in India. She further submits that the services are rendered by the Appellant to Carrier China and not the customers of Carrier China located in India. She also submits that all the activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Central Excise And Service Tax, Panchkula/Delhi, Final Order Nos. 60287-60288/2023 dated 25.08.2023 (Tri.- Chand.) M/s Baheti Agri Links vs. Commissioner, Customs & Central Excise, Indore, Final Order No.51027/2023 dated 02.08.2023 (Tri.-Delhi) Orbit Research Associates Private Limited vs. Commissioner of Service Tax Appeals-l), New Delhi, Final Order No. 50970/2023 dated 31.07.2023 IBM India Pvt. Ltd. vs. Commr. Of C. EX. & S.T., Bangalore-LTU, 2020 (34) G.S.T.L. 436 (Tri. - Bang.) 4.4 She further submits that the ratio of all the decisions cited (supra) clearly applies to the facts and circumstances of the present case and accordingly the demand needs to be set-aside. 4.5 She further submits that the demand for the period April 2006 to March 2007 is time barred and extended period of limitation cannot be invoked because the appellant has not suppressed any material fact in respect of the services rendered to Carrier China and has shown all the amounts in their profit and loss account and balance sheet which are public documents. 4.6 She also made submission regarding the interest and the penalties and submitted that when service tax is not payable, the question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Arcelor France since the services were performed and consumed in India and they would not qualify as "export of service" under the Export of Service Rules, 2005. Arcelor India believed that it was not required to pay service tax on the commission received from Arcelor France as the service qualified as "export of service". xxxxxxxxxxx 45. The 2005 Export Rules were introduced to achieve the destination based consumption tax concept and so exemption is provided from payment of service tax to services exported out of India. The 2005 Export Rules set out various conditions for a service to qualify as export of service. Basically, the service recipient should be outside India; service should be provided from India and delivered outside India; and payment should be received in foreign currency. 46. Prior to 19.04.2006, under rule 3(3) of the 2005 Export Rules, the export of taxable service would mean, in relation to taxable services, such taxable services which have been provided and used in or in relation to commerce or industry and the recipient of such service is located outside India. For the period between 19.04.2006 and 01.03.2007, export of taxable service in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Export Rules if a person residing in India provides a service to a foreign entity to enable it to book orders for customers in India. This is for the reason that the foreign entity is located outside India and the payment is received by the person residing in India in convertible foreign exchange. 54. The four issues raised in the reference order have been dealt with extensively and as they are intermingled, the reference is answered in the following manner: (i) Arcelor India, a service provider, is providing BAS service to Arcelor France, which is a service recipient. Arcelor India is, therefore, providing service to Arcelor France which is situated outside India and Arcelor India receives consideration in convertible foreign exchange. The service provided by Arcelor India is, therefore, delivered outside India and used outside India as is the requirement under the 2005 Export Rules prior to 01.03.2007 and Arcelor India provides services from India which are used outside India as is the requirement after 01.03.2007. It cannot, therefore, be doubted that Arcelor India provides "export of service" as contemplated under rule 3 of the 2005 Export Rules; and (ii) Arcelor France ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee falls within the definition of export of services. 9. Further, the Hon'ble Bombay High Court in the case of Commissioner of Service Tax-VII vs. Life Care Medical Systems 2018 (18) GSTL 587 (Bom.) after relying upon its earlier judgement in the case of A.T.E Enterprises Pvt. Ltd. cited (supra) has held in Para 6 as under:- "6. We find that this Court in SGS India Pvt. Ltd. (supra) has held that where services were rendered in India to a foreign party, then such service is not liable to tax as it would be export of service. Further, in fact almost similar to this case, this Court has held that the Service Tax would not be payable in Commissioner of Service Tax v. A.T.E. Enterprises Pvt. Ltd., 2018 (8) G.S.T.L. 123 in respect of an Indian Agent, rendering the services of marketing the goods of a foreign party within India and receiving commission from the foreign party, as it is export service by following the decision of this Court in SGS India Pvt. Ltd. (supra). In fact, we find that the Central Board of Excise & Customs has issued a clarification by Circular No. 111/2009, dated 24th February, 2009 that in terms of Rule 3(1)(iii) of Export of Services Rules, 2005, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
