TMI Blog2023 (12) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... gents, results in export of tyres by the appellant, which is their business; to this extent, it is found that the categorization of the services under Business Auxiliary Service is correct. Moreover, it cannot be said that the services are received abroad though, they are certainly performed outside India; as long as the recipient and his business are in India, it cannot be said that the said service is not received in India. Receipt of the service takes the colour of recipient of the service that is to say receipt of service is decided by the recipient. The services rendered by the agents are not a personalized service availed by the appellants on their visit to abroad; moreover, by no stretch of imagination, the appellant being a body corporate, services cannot be held to have been received and enjoyed overseas, as they have no place of business abroad. Understandably, the benefit of the service accrued to the business of the appellant in India and therefore, to that extent, receipt of the services is certainly in India and not abroad. To this extent, the contention of the Revenue is correct - there are no infirmity in the findings of the OIO and OIA to the extent that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and received in a territory beyond India, the same are not taxable. Two show-cause notices, dated 25.04.2008 and 30.06.2009, covering the period January 2004 to November 2007 and December 2007 to March 2009, demanding service tax of Rs.29,05,153/- and Rs.12,00,588/- respectively, were issued to the appellants; the show-cause notices were confirmed by the OIOs dated 22.02.2011 and 30.08.2010 respectively; on an appeal filed by the appellants, Commissioner (Appeals) vide impugned orders dated 26.12.2011 and 30.08.2011 respectively, upheld the Orders-in-Original. 2. Shri Ajay Aggarwal, assisted by Shri Naveen Bindal, learned Counsels for the appellants, submits that there is no dispute on the fact that the service has been rendered and received at the same time and entirely outside India; learned Commissioner has categorically held more than once in the impugned orders that the services were rendered abroad. He relies on the decision of the Tribunal in the case of Orient Crafts 2006 (4) STR 81 (Del.) and CBEC Circular dated 19.04.2006 and submits that only services received in India are taxable under these provisions. He submits that as per Section 64 (1) of the Finance Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellants in the manufacture and export of tyres and therefore, the services of the overseas agents, though performed outside India have been received by none other than the appellants situated in India; the Adjudicating Authority was correct in holding that the services rendered are taxable in view of Rule 2(1)(d)(iv) of Service Tax (Fifth Amendment) Rules, 2005 and sub-Section- (iii) of Section 66A of Finance Act, 1994. He relies on Melange Developers Pvt. Ltd. 2020 (33) GSTL 116 (Tri. LB) and Northern Operating Systems Pvt. Ltd. 2022 (61) GSTL 129 (SC). 6. Heard both sides and perused the records of the case. The appellant has appointed commission agents abroad who would book orders for the sale of tyres for the appellants; the appellant export the tyres manufactured in India and accordingly realise the sale proceeds, for the services rendered by the overseas agents, the appellants pay them a commission. Revenue seeks to levy service tax on the commission paid by the appellants to the commission agents; it is alleged that the agents are performing Business Auxiliary Service to the appellants; the services rendered by the overseas agents are received and utilize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he service is provided or to be provided, or has his permanent address or usual place of residence, in a country other than India, and such service provider does not have any office in India, the person who receives such service and has his place of business, fixed establishment, permanent address or, as the case may be, usual place of residence, in India. 7.3. Rule 2 (1)(d)(iv) as further amended by the Service Tax (Second Amendment) Rules, 2006 vide Notification No.10/2006 dated 19.04.2006, reads as under: 2(1) in these rules unless the context otherwise requires- (d) person liable for paying the service tax means: (iv) in relation to any taxable service provided or to be provided by any person from a country other than India and received by any person in India under Section 66A of the Finance Act, 1994, recipient of such service; 7.4. Section 68 (2) of the Finance Act, 1994 provides: 68(2) Notwithstanding anything contained in section 68 (1) in respect of any taxable service notified by the Central Government in the Official Gazette the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rate specified in Section 66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recipient and his business are in India, it cannot be said that the said service is not received in India. Receipt of the service takes the colour of recipient of the service that is to say receipt of service is decided by the recipient. The services rendered by the agents are not a personalized service availed by the appellants on their visit to abroad; moreover, by no stretch of imagination, the appellant being a body corporate, services cannot be held to have been received and enjoyed overseas, as they have no place of business abroad. Understandably, the benefit of the service accrued to the business of the appellant in India and therefore, to that extent, receipt of the services is certainly in India and not abroad. To this extent, we find that the contention of the Revenue is correct. We find no infirmity in the findings of the OIO and OIA to the extent that the appellants have received services from foreign agents who have procured order outside India against which they had supplied the goods and thus have rendered themselves liable to pay service tax on Reverse Charge Mechanism in terms of Section 66A of Finance Act, 1944 and the Taxation of Service (Provided from Outside I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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