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TMI Blog2024 (11) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... Circular No. 111/05/2009-S.T. dated 24.02.2009, it has been clarified that for the services under category III [rule 3(i)(iii)], the deciding factor is the location of the service receiver and not the place of performance. We observe that the said Circular has interpreted the phrase used outside India to mean the benefit of the services accrues outside India. Business auxiliary services falls under Rule 3(i)(iii) of the Export Service Rules. Thus, in this case we observe that the phrase used outside India has to be interpreted to mean that the benefit of the services accrues outside India. In the present case, we observe that the appellant has collected the information and provided the same to the foreign principal, who, after analyzing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services, including services under the category of business auxiliary service to their clients located in the United Kingdom (U.K.). In the instant case, the Appellant has been rendering the service to M/s. J.S. Humidifiers PLC located in the U.K., who have no establishment in India. The Appellant rendered the service of collecting necessary information based on the questionnaire sent by M/s. J.S. Humidifiers PLC, U.K. and supplying back such information directly to the foreign party in the U.K. 2.1. M/s. J.S. Humidifiers PLC in the U.K., short lists the probable customers from such information supplied by the Appellant. After proper screening of the same, the principals from U.K. contact the relevant customers in India and negotiate the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r alia demanding Service Tax for the period from 2006-07 to 2010-11. 3.3. The said Notice was adjudicated by the ld. adjudicating authority vide the Order-in-Original No. 12/JC/ST/Kol/2013-14 dated 30.09.2013 wherein the demand of Service Tax of Rs.11,12,731/-was confirmed, along with interest. Penalty equal to an amount tax confirmed in the impugned order was also imposed under Section 78 of the Act. The demand of Rs.3,49,798/- raised in the Notice was dropped. 3.4. On appeal, the Ld. Commissioner (Appeals) vide the impugned order upheld the confirmation of the demand of Service Tax of Rs.11,12,731/- along with interest and penalty. The dropping of the demand of Rs.3,49,798/- was also upheld. 4. Aggrieved against the confirmation of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal located in a foreign country and thus the benefit of the information gathered by the them accrues only to the foreign principal. Thus, the appellant contended that in terms of Circular No. 111/05/2009-S.T. dated 24.02.2009, the services rendered by them would be appropriately classifiable as export of service . Accordingly, the Appellant submits that the services rendered by them to the foreign principal viz. M/s. J.S. Humidifiers PLC, U.K. are not liable to Service Tax under the category of business auxiliary service . 5.2. The Appellant further submits that the Department has relied upon the Circular No. 141/10/2011-TRU dated 13.05.2011 to interpret the words used outside India ; however, in this case, the demand Notice has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... phrase used outside India has been interpreted to mean that the benefit of the service should accrue outside India. In the present case, the principals are not having any establishment in India and the services are used by them outside India. Accordingly, the appellant has contended before us that the said activity falls within the ambit of export of services . 8.1. We observe that the impugned order has relied upon the Circular No. 141/10/2011-TRU dated 13.05.2011 to interpret the words used outside India . We observe that the demand in this case has been raised for the period from 2006-07 to 2010-11 which is prior to the issuance of the above Circular. Hence, we hold that the Circular No. 141/10/2011-TRU dated 13.05.2011 cannot be applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the service receiver and not the place of performance. In this context, the phrase used outside India is to be interpreted to mean that the benefit of the service should accrue outside India. Thus, for Category III services [Rule 3(1)(iii)], it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside India. 8.4. From the Circular reproduced above, we observe that the said Circular has interpreted the phrase used outside India to mean the benefit of the services accrues outside India. Business auxiliary services falls under Rule 3(i)(iii) of the Export Service Rules. Thus, in this case we observe that the phrase used outside India h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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