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TMI Blog2024 (11) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... reply making submission that they were rendering service to various entity because of which the entire demand is liable to be set aside. The turnover undertaken within the domestic market was less than the threshold limit, therefore, they were not required to pay any Service Tax. 2. After due process, the Adjudicating authority dropped part of the demand and confirmed the Service Tax demand of Rs.5,88,190/- along with interest and penalty. Being aggrieved, the Appellants have filed the present Appeal before the Tribunal. 3. The Ld.Consultant appearing on behalf of the Appellant submits that the Appellant has provided service to M/s. Mitsibishi Boeki Ltd., Japan by way of identifying customers in India for the machines manufactured by them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Export of Service Rules, 2005 that the payment for such services should be received in foreign currency stands fulfilled by the Appellant and there is no dispute on this ground by the Revenue. 6. In respect of the demand pertaining to foreign currency earned as commission, the Ld.Consultant submits that in respect of Export of Services Rules, 2005 Para 3(iii), so long as the services are provided to a foreign entity, no Service Tax is payable. He also relies on the Board Circular No.111/5/2009-ST dated 24.03.2009, wherein under Para 2(iii) and under (a) has been clarified that no Service Tax could be required to be paid on the activities mentioned therein. Thus, he submits that as per the statutory provisions, no Service Tax is requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating authority and justifies the confirmed demand. 10. Heard both sides and perused the appeal papers and other documentary evidence placed before us. 11. From the Table given above, it is observed that the Department is not disputing that the Appellant has provided service to the foreign entity and has earned foreign exchange. We have also gone through the relevant portion Board Circular dated 24.02.2009, clarifying the Export of Services Rules, 2005, which is reproduced below: Export of Services Rules, 2005 - Applicability clarified Circular No. 111/5/2009-S.T., dated 24-2-2009 F.No. 137/307/2007-CX.4(Pt.) Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being undertaken in India. The departmental officers seem to have taken a view in such cases that since the activities pertaining to provision of service are undertaken in India, it cannot be said that the use of the service has been outside India. 2. The matter has been examined. Sub-rule (1) of rule 3 of the Export of Services Rule, 2005 categorizes the services into three categories : (i) Category I [Rule 3(1)(i)] : For services (such as Architect service, General Insurance service, Construction service, Site Preparation service) that have some nexus with immovable property, it is provided that the provision of such service would be 'export' if they are provided in relation to an immovable property situated outside India. (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xample, under Architect service (a Category I service [Rule 3(1)(i)]), even if an Indian architect prepares a design sitting in India for a property located in U.K. and hands it over to the owner of such property having his business and residence in India, it would have to be presumed that service has been used outside India. Similarly, if an Indian event manager (a Category II service [Rule 3(1)(ii)]) arranges a seminar for an Indian company in U.K. the service has to be treated to have been used outside India because the place of performance is U.K. even though the benefit of such a seminar may flow back to the employees serving the company in India. For the services that fall under Category III [Rule 3(1)(iii)], the relevant factor is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the same view. In the present case, both the facts as to whether the service has been rendered to a foreign entity or not and as to whether the appellant has received the proceeds in convertible foreign exchange or not, are not under dispute. Therefore, we find force in the Appellant's arguments that no Service Tax is required to be paid. Accordingly, we set aside the confirmed demand of Rs.3,12,770/- given the Table A above. 13. Coming to the confirmed demand in respect of 'Erection, Commissioning and Installation Services', from the Table B given above, it is observed from the above Table that the Appellant's turnover during the period 2008-09 to 2011-12 was much below the threshold limit. Hence no Service Tax is required to be paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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