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TMI Blog2025 (4) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... in foreign currency on business promotion and other activities. 2. The appellant is a manufacturer-exporter of pharmaceutical products and is a 100% Export Oriented Unit. It established representative offices in many countries to promote its goods and to liaison with the local authorities in such countries. According to the appellant, these representative offices do not have any independent revenue or clients and the purchase orders are entered with the clients directly by the appellant and so the representative offices do not enter into any contract with the clients. The payment for goods supplied to the customers is received by the appellant and all the expenses incurred in the supply of goods are claimed as expenses in India. The salari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Tribunal in the Final Order No. 50314-50315/2018 dated 12.01.2018. For the period 2006-2007 to June 2012 i.e. pre-negative era, wherein the issue was decided by the Tribunal in favour of the appellant, relying on the decision of the Tribunal in the case of Torrent Pharmaceuticals Limited Vs. Commissioner - 2015 (39) STR 97 (Tri.-Ahmd.) and Milind Kulkarni Vs. Commissioner - 2016 (44) STR 71 (Tri.-Mum.). It was accordingly, concluded that the tax liability under BAS cannot be sustained as the actual expenses now sought to be taxed are only with reference to setting up, running and also expenses of that branch incurred by the appellant and not relating to any expenditure in their branches with reference to BAS. The observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with Section 66A and Rules framed for the purpose of charging tax on services received from abroad. Unless both are applied together, the jurisdiction to tax would be in question. ................................................... ................................................... 23. The catena of judgments cited for both sides, viz., British Airways v. Commissioner of Central Excise (Adjn) [2014-TIOL-979-CESTAT-Del = 2014 (36) S.T.R. 598 (Tri.-Del.)], Torrent Pharmaceuticals Ltd. v. Commissioner of Service Tax [2015 (39) S.T.R. 97 (Tri.-Ahmd.)] and Infosys Ltd. v. Commissioner of Service Tax [2014-TIOL-409-CESTAT-Bang = 2015 (37) S.T.R. 862 (Tri.-Bang.)] does support the proposition that a service is taxable under Section 66A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as there is no inference of any monitorial aspect in undertaking such an exercise. An exporter who operates through branches is clearly not the target of the legal fiction of branches being distinct from head office. The proposition that the intent of Section 66A in taxing the activity rendered by an overseas branch to its headquarters in India is limited to the local commercial or business activities of the head office is thereby confirmed. Consequently, mere existence as a branch for the overall promotion of the objectives of the primary establishment in India which is essentially an exporter of services does not render the transfer of financial resources to the branch taxable under Section 66A." 6. The Final Order No. A/50314-50315/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to set aside the demand after introduction of „negative list‟ regime is applicable to the dispute before it and, therefore, set aside the demand being contrary to law. 8. In a recent decision, the Tribunal considered the issue for the period September 2014 to September 2015 vide Final Order No. 50250/2023 dated 2.3.2023 and observed that the issue involved has been decided in favour of the appellant in their own case for pre-negative list and post negative list and, therefore, the demand deserves to be set aside. The said order of the Tribunal was challenged by the department in CAD No. 21294/2024 and vide order dated 9.7.2024, the Supreme Court dismissed the appeal both on the ground of delay as well as on merits. Consequently ..... X X X X Extracts X X X X X X X X Extracts X X X X
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