9911796707
TMI Blog2024 (7) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... SA Company in foreign countries, this would amount to export of services in terms of Rule 3 of the Export of Services Rules, 2005. Rule 3 (2)(b) specifies that when the services are rendered abroad, the consideration should be received in convertible foreign currency. Admittedly, there is no dispute that the Appellant is receiving the consideration in convertible foreign exchange. Only objection of the Revenue is to the effect that such foreign exchange is being received form USA Company and not directly from the clients. There are no specific bar or condition at Rule No. 3(2)(b) that the convertible foreign exchange should be received only from the clients and not through any other person. Therefore, the Revenue's contention that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (in respect of the extended period). - MR. R. MURALIDHAR, MEMBER (JUDICIAL) AND MR. RAJEEV TANDON, MEMBER (TECHNICAL) Mr. Arvind Baheti, CA for the Appellant Mr. K. Chowdhury, Authorized Representative for the Respondent ORDER The Appellant is manufacturer and seller of water treatment chemicals. They also provided services in relation to such sales. Nalco Company, USA is an associate enterprise of the Appellant. They sell their units throughout the world. They have developed and patented Nalco 360 service i.e. an IT enabled service in relation to monitoring of the performance of the sold units. An Agreement was entered into Nalco USA and the appellant to provide the IT enabled services for the units located in USA, which was to be do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated outside India and the services are provided from India, the same would be taken as Export of services. The condition specified under Rule 3(2) (b) specifies that the payment of service should be received in convertible foreign exchange. In this case, while they are providing the services to the overseas parties on behalf of the Nalco Company, USA, the consideration towards the same is initially received by Nalco Company, USA and the same is given back to the Appellant as consideration through convertible foreign exchange only. He submits that the Department has taken the view that the amount is required to be received directly from the clients only. Since the amount has been received from Nalco Company, USA, the Department is taking th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he prays that the Appeal may be allowed on merits. 5. He further submits that the Appellant is registered with the Central Excise Department for providing various services. They have been paying Service Tax for their Indian operations and also have been filing their ST-3 Returns. In view of their firm belief that no Service Tax is required to be paid for the services rendered abroad for which the consideration is being received in foreign exchange, they have not paid the Service Tax. They have also been filing all their ST-3 Returns properly. In view of these facts, the Department cannot allege any suppression on the part of the Appellant to fasten the liability of extended demand on them. Accordingly, he prays that the confirmed demand for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the clients. We take the view that this is clearly a commercial arrangement between both the companies. Instead of the individual clients in the foreign country paying separately for each transaction to the Appellant, the exercise is taken up by the USA Company by collecting that amount and they are transferring the consideration amount by way of foreign exchange. It is not case of the Department that the amount received by the USA Company is not by way of any non-convertible foreign exchange. 9. Further, we do not see any specific bar or condition at Rule No. 3(2)(b) that the convertible foreign exchange should be received only from the clients and not through any other person. Therefore, we are not in agreement with the Revenue's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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