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2017 (10) TMI 903 - AT - Service TaxImport of services - manpower recruitment supply agency service - Levy of service tax on salaries and perquisites of the employees and expats - Held that: - the employees have been deputed by BMW, AG and they are under direct control and supervision of BMW India. The employees are paying income-tax in India and making EF contribution in India. Also, the employees remained on the payroll of BMW India and there is employment agreement between individual employee and BMW India - similar issue came up before the Hon’ble Allahabad High in the case of Computer Science India Pvt.Ltd. [2014 (11) TMI 125 - ALLAHABAD HIGH COURT], where it was held that Unless the critical requirements of clause (k) of Section 65(105) are fulfilled, the element of taxability would not arise - taking into account that BMW AG is not a manpower supplier, the demand on the issue is not sustainable and is liable to be set aside. Non-payment of service tax - commission received on account of services rendered in relation to sale of cars in India by BMW AG, Germany - Held that: - the Noticee speaks of evaluation of prospective customers. If it is so, then sub-clause (vii) of clause (19) of Section 65 of the Act comes into play, which defines business auxiliary service to mean any service in relation to evaluation or 'development of prospective customer'. Thus, in this manner, Business Auxiliary Service under sub-clause (vii) of clause (19) of Section 65 of the Act would be applicable instead of Support Services of Business or Commerce - the SCN was issued on the basis of an order passed by the Principal Bench of CESTAT on a stay application in Microsoft Corporation (I) Pvt. Ltd. Vs. CST, New Delhi [2009 (7) TMI 105 - CESTAT, NEW DELHI]. However, in the same appeal, the matter relating to the provision of business auxiliary service as export of service has finally been settled by above quoted judgment in Microsoft Corporation (I) Pvt. Ltd. Vs. CST, Delhi [2014 (10) TMI 200 - CESTAT NEW DELHI (LB)] in favor of assessee and is thus no longer res integra. Hence, the demand on this ground is liable to be set aside. Non-payment of service tax - charges received from BMW,AG Germany on account of services rendered in relation to international purchasing office in India - Held that: - the appellants are engaged in providing details of local vendors which meet requirements laid down by BMW, AG. The quantum of consideration is not dependent on any action subsequent to the said use of information by BMW, AG. We find that the above issue is no longer res integra and is covered by the judgment of this Tribunal in the case of Paul Merchants Limited [2012 (12) TMI 424 - CESTAT, DELHI (LB)], where it was held that service tax is a value added tax, which in turn is a destination based consumption tax in the sense that it is levied on commercial activities, and it is not a charge on the business but a charge on the consumers. There is nothing in Export of Service Rules, 2005 which can be said to be contrary to the principle that a service not consumed in India is not be taxed in India - demand set aside. Appeal allowed - decided in favor of appellant.
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