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TMI Blog2024 (11) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... les and Cenvat Credit Rules ensures that tax is not added to the cost of export so that Indian exporter can compete with overseas market. The Hon ble Supreme Court in CCE v. Coca Cola India (Pvt.) Ltd [ 2007 (4) TMI 17 - SUPREME COURT] dismissed Revenue s appeal holding that when an assessee is eligible to Modvat credit, the situation becomes revenue-neutral. In the present case, service tax demanded entitles the appellants to the credit thereof and claim refund thereof under 41/2007 since it is stated by appellants that they have no other liability for which the exercise may become revenue-neutral. Thus we cannot sustain the impugned Order-in-Appeal. - HON BLE MR. P. DINESHA, MEMBER ( JUDICIAL ) And HON BLE MR. VASA SESHAGIRI RAO , MEMBER ( TECHNICAL ) For the Appellant : Ms. P. Saravanaselvi , Advocate For the Respondent : Mr. N. Satyanarayanan , Authorised Representative ORDER Order : - Per Mr. VASA SESHAGIRI RAO Brief facts of the appeal No. ST/42789/2014 filed by M/s. Kishore Apparels Pvt. Ltd., Tirupur (the appellant herein) are that they are engaged in the manufacture and export of knitted garments. On verification, it was noticed that the appellants have availed the servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commissions agent, but does not include any information technology service and any activity that amounts to manufacture within the meaning of clause (f) of section 2 of the Central Excise Act, 1944. Explanation.- For the removal of doubts, it is hereby declared that for the purposes of this clause, information technology service means any service in relation to designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer system; ii. In terms Section 66A of the Finance Act, 1994 introduced w.e.f. 18.06.2006, if any taxable service is provided by a person from outside India and received by a person who has his place of business in India, it shall be treated as if the recipient himself had provided such taxable service in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Saravanaselvi representing the Appellant has contended as follows: - i. That the entire proceedings are based on an unsigned Show Cause Notice which is void ab initio relying on the decisions in the cases of: - a. Prakash Krishnavtar Bhardwaj Vs. ITO [(2023) 150 Taxmann.com 60 (Bombay)] b. SPS Steel and Rolling Mills Vs. CCE [(2007) 219 ELT 881] c. Shakambari Overseas Trades Pvt Ltd Vs. CCE [(2008) Taxmann.com 922 (Kolkata CESTAT)] ii. Show Cause Notice has not invoked the provisions of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. iii. The activity of canvassing orders for export was carried out outside India. iv. Notification No. 14/2004-ST dated 10.09.2004 exempts taxable service in the nature of business auxiliary service in relation to agriculture, printing, textile processing or education relying on the following decisions: - a. Texyard International Vs. CCE [(2015) 40 STR 322] b. Arvind A. Traders Vs. CCE [(2016) 44 STR 264 (Tri.-Chennai)] c. Polar Home Textiles (P) Ltd Vs. CST [(2024) 161 Тахmапn.com 136 (Chennai - CESTAT)] v. As per Foreign Trade Policy for the period 2006 to 2009, para 2.483, in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 issued by the Additional Commissioner of Central Excise, Customs and Service Tax, Coimbatore was not signed and so, the proceedings initiated are void ab initio. A perusal of the Show Cause Notice dated 30.09.2009 enclosed with the Appeal was found to be not signed by the Additional Commissioner of Central Excise, Customs and Service Tax, Coimbatore but was certified as True Copy. This certification whether done by the officer of the Department or by the Appellant or the Counsel is not clear. To discuss and give a finding, the Appellant must have enclosed the original copy of the Show Cause Notice issued which was received by them. As the Appellant is succeeding on merits as detailed below, there is no need to discuss about this issue and also on invocability of extended period. 7. The issue of chargeability of service tax on the commission paid to overseas agents is no more res-integra and the Tribunal, Chennai has held in the case of Texyard International Vs. Commissioner of Central Excise, Trichy [2015 (40) STR 322 (Tri.-Mad.)] that demand of service tax is not sustainable. All the facts obtaining in the present appeal are similar to those which were discussed in detail in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss Account. Therefore, extended period cannot be invoked. As regards Revenue s appeal against waiver of penalty under Sections 76, 77 78, ld. advocate submits that both the lower authorities have rightly waived penalty. He relied on the following decisions :- (1) Commissioner v. Advantage Media Consultant - 2009 (10) S.T.R. 449 (Tri.-Kolkata) [affirmed by Hon. Supreme Court in 2009 (14) S.T.R. J49 (S.C.)] (2) Needle Industries (I) Pvt. Ltd. v. CCE, Salem - 2010 (17) S.T.R. 525 (Tri.-Chennai). 5. On the other hand, ld. AR reiterated the findings of the adjudicating authority wherein the demand was rightly confirmed. She submits that assessees are not covered under Exemption Notification No. 14/2004-S.T. On the Revenue s appeal, she reiterated the grounds of appeal and submits that they are not eligible for waiver of penalty under Section 80 of Finance Act, 1994 and the lower appellate authority has erred in waiving penalties. 6.1 We have carefully considered the submissions of both sides and also examined the records. The assessees filed appeals contesting the service tax demanded under reverse charge on the commission paid to the overseas agents for export of finished goods. The Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. The appellants are Textile manufacturer and exporters. The word textile processing referred in the notification is to be understood in a broader sense. The dictionary meaning of textile processing means sequence of operations or changes undergone and the definition of textile includes fabrics, fibre, yarn suitable for weaving into fabric. The exemption of service tax under BAS was allowed in relation to four industries namely agriculture, printing, textile processing and education. Therefore, the appellant being textile industry, it is covered under the category textile processing in the notification. 6.3 Commission paid to the overseas agents is in respect of service provided by that agent to the appellant to export its goods and thereby sales is promoted. That is an activity incidental or auxiliary to processing of textile goods and covered by Business Auxiliary Service and Clause (d) of the notification extracted above covers the case of the appellant bringing the export promotion activity abroad as incidental and auxiliary to the activity of production as is meant by Section 65(19) of Finance Act, 1994. Appellants are accordingly entitled to the benefit of exemption Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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