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2022 (6) TMI 306 - AT - Service TaxLevy of service tax - export of services or not - Distinct Person - IT Service provided by the appellant to their associate company M/s Celtic Cross Holding Inc. USA - appellant could not prove that they have received the export proceeds in convertible foreign exchange - appellant and the service recipient are establishment of a distinct person or not - Rule 6A(1) of Service Tax Rules, 1994 - HELD THAT:- From the facts on the records, it is not disputed that the appellant company is working under the banner of M/s Celtic System Pvt. Ltd. registered with the registrar of companies in India. Whereas, the Service recipient is working under the banner of M/s Celtic Cross Holding Inc. USA. Both the companies are separately registered in their respective countries. Even the directors of the company though two directors are common but others are different. Even if there is a note in the balance sheet of the appellant company that they are associate of M/s Celtic Cross Holding Inc. USA but in the eyes of law as per the companies act both companies are independent entity. Therefore, Clause (f) of Rules 6A (1) of Service Tax Rules, 1994 stand complied with. This issue has been considered of Hon’ble Gujarat High in the case of LINDE ENGINEERING INDIA PVT. LTD. VERSUS UNION OF INDIA [2020 (8) TMI 181 - GUJARAT HIGH COURT] wherein the Hon’ble Gujarat High court even in case where the Indian Company was 100% subsidiary of the foreign company namely Linde AG Germany has held that both are different entity. In the present case the appellant are on better footing as they have constitutionally two different entity one is the appellant and other is M/s Celtic Cross Holding Inc. USA. Therefore, following the judgment of Gujarat High Court, it is clear that in the present case the appellant and the service recipient are two distinct person, hence, the service provided by the appellant to M/s. Celtic Cross Holding Inc. USA clearly falls under export of service. The demand confirmed by the adjudicating authority and upheld by the Commissioner (Appeals) is not correct and legal - Appeal allowed - decided in favor of appellant.
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