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2017 (12) TMI 965 - AT - Service TaxBusiness auxiliary services - the appellant had entered into an agreement with DIL and was performing various activities and received consideration in foreign currency - export of services or not? - Held that: - under the Export of Service Rules, 2005, taxable services have been divided into three categories. Admittedly, the services provided by the appellant fall under the category 3 - On the question whether the services mentioned in category 3 qualify as export, various judicial pronouncements have held that to qualify as export, the service recipient should be located outside India and the fact that the service is performed in India is not relevant - the services provided by the appellant qualify as export of service. Reverse charge mechanism - commercial training or coaching service - technical collaboration agreement between M/s.DIL and DAIPL under which M/s.DIL would train the employees of DAIPL with regard to the Daikin technology - Rule 3(ii) of the Taxation of Services (provided from outside India and received in India) Rules, 2006 - Held that: - the Commissioner has given no finding on this aspect at all and has confirmed the demand and penalty - the matter is liable to be remanded back to adjudicating authority to examine the contention of appellant afresh and given proper findings. Manpower recruitment or supply service - commercial concern or not? - Held that: - the department has not brought out the fact that the foreign company is a commercial concern engaged in manpower recruitment or supply service - As per the agreement, fee and airfare and cost of the specialist is to be borne by M/s.Daikin Air-conditioning India. Admittedly, these payments are being made by Indian company to Japanese company as a whole - the issue is covered by the judgement of this Tribunal in the case of Volkswagen India Pvt.Ltd. vs. CCE [2013 (11) TMI 298 - CESTAT MUMBAI], where it was held that The global employees working under the appellant are working as their employees and having employee-employer relationship. There is no supply of manpower service rendered to the appellant by the foreign/holding company. Penalty - revenue neutral situation - technical consultancy service - Held that: - the entire situation was Revenue neutral as the credit was available with the appellant themselves - the Revenue neutral situation comes about in relation to the credit available to the appellant himself and not by way of availability of credit to anyone else - penalty not justified. Appeal allowed in part and part matter on remand.
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