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2015 (8) TMI 794 - AT - Service TaxDemand of service tax - Reverse charge mechanism - Import of services were being used for export of goods - whether appellant-assessees are eligible to the benefit of exemption of service tax under Business Auxiliary Service under Notification No.14/2004-ST dt. 10.9.2004 and whether assessees are liable for penalty as contended by Revenue - Held that:- The lower authorities denied the exemption merely on the ground that the said services are not used for textile processing. On careful reading of the above notification, it is evident that service tax was exempted during the relevant period for the services provided under Business Auxiliary Service if it relates to agriculture, printing, textile processing or education. The appellants are Textile manufacturer and exporters - The exemption of service tax under BAS was allowed in relation to four industries namely agriculture, printing, textile processing and education. Therefore, the appellant being textile industry, it is covered under the category "textile processing" in the notification. Appellants being the exporter of textile made ups as per the Foreign Trade Policy are not expected to export the taxes. Appellants pleaded that there was no suppression of facts with deliberate intention to evade payment of service tax. As payment of service tax by the recipients was under dispute for a long period till that was settled by the decision of Apex Court in the case of UOI Vs Indian National Ship Owners Association - [2010 (12) TMI 12 - Supreme Court of India] there was no deliberate intention to make suppression of facts. - Service tax if any payable under reverse charge is permissible to be availed as cenvat credit and that may be refundable under Notification No.41/2007 unless otherwise deniable by law. The provision made in Central Excise Rules and Cenvat Credit Rules ensures that tax is not added to the cost of export so that Indian exporter can compete with overseas market. service tax demanded entitles the appellants to the credit thereof and claim refund thereof under 41/2007 since it is stated by appellants that they have no other liability for which the exercise may become revenue-neutral. - Decided in favour of assessee.
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