TMI Blog2010 (5) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... , they paid service tax under protest. – Held that: - What is in dispute is whether the business auxiliary service was delivered outside India and used outside India. The rendering of the service was complete only when the purchase orders canvassed by the appellant in India were received by the foreign companies. These purchase orders were, admittedly, received abroad. They were also, admittedly, acted upon by the foreign companies abroad. In other words, the benefit of the service provided by the appellant accrued to the foreign companies outside India. The condition in question stood fulfilled by the appellant. – Benefit of export allowed - ST/108/09 - - - Dated:- 26-5-2010 - Represented by :- Shri S.K. Babaladi, Consultant, for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal was rejected by the Commissioner (Appeals), aggrieved from the same the appellant is before me. 3. The learned Advocate appearing on behalf of the appellant submits that in this case the appellant has provided the service of introducing the Indian client to their foreign principal M/s. Ital Vacccum, S.R.L., Itlay, who does not have any office in India, as a commission agent for promoting their sales in India for which they are getting commission from their foreign principal in foreign currency as export of services which are exempted and not liable to pay any service tax. He further contended that the appellant has provided the services of sale promotion to their foreign principle, who used this service outside India and paid the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is not in force, there is no bar to return such amounts. He also submitted that in the case of Commissioner of Central Excise Vs. Jai Laxmi Finance Co. reported in 2006 (3) S.T.R. 25 (Tri.-Del.) the same view was taken by the Tribunal. Hence, their refund claim be allowed and impugned order be set aside. 4. On the other hand, the learned SDR appearing on behalf of the Revenue submitted that in this case the appellant is provided their service in India and same are being used in India, hence the appellant is liable to pay service tax. In support of his contention he placed reliance on All India Fedn of Tax Practitioners Vs. Union of India reported in 2007 (7) S.T.R. 625 (S.C.) wherein the Hon'ble Ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by courier or electronic means to the suppliers. Acting upon those purchase orders, the suppliers exported the goods to the buyers in India and directly collected payments from the buyers. After receipt of the payment from the buyers, the suppliers paid commission to the appellant in convertible foreign exchange. The appellant paid service tax on these commissions under protest. Subsequently, the appellant claimed rebate of service tax under Rule 5 of the Export Service Rules, 2005. Rule 5 ibid allowed rebate of service tax paid on a taxable service which was exported subject to such conditions/limitations and to fulfillment of such procedures as may be specified in the said notification. The relevant notification prescribed mainly two cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24.2.2009. The Board, in respect of business auxiliary services falling under Rule 3(1) (ii) of the Export Services Rules, 2005, clarified thus; The phrase 'used outside India' is to be interpreted to mean that the benefit of the service should accrue outside India. Thus, 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. What is accrued outside India is the benefit in terms of promotion of a business of a foreign company . This Circular is in conformity with the provisions of Rule 3 and 5 of the Export of Services Rules, 2005. The service rendered by the appellant was admittedly one of the business auxiliary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases the services has been performed in India and they were consumed in India. In this case the service of procuring the purchase orders for the foreign supplier, who is outside India and those procurement of purchase orders of good were used by the foreign supplier outside India and acted upon them supplied the goods from outside India. Hence, the reliance placed by the learned DR is not relevant to the facts of this case. The reliance in the case of Microsoft Corpn. (I) Pvt. Ltd. is also not relevant as there was a prima facie view of the Hon'ble High Court which is not the final view. The case of KSH International Pvt. (supra) is squarely applicable to the facts of this case. Following the ratio in the case of KSH International Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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