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2023 (10) TMI 882 - AT - Service TaxClassification of services - Business Auxiliary Service or not - commission received in convertible foreign currency - export of services - exemption from service tax or not - Board Circular No. 111/5/2009-ST dated 24.02.2009 - penalties - HELD THAT:- Business Auxiliary Service rendered by the Appellant falls under category of Rule 3(1)(iii) mentioned above. As per the clarification cited, the services rendered by the Appellant would be considered as export of service, if they are provided in relation to business or commerce to a recipient outside India and the consideration is received in foreign exchange. The Circular further clarifies that in respect of the services falling under Rule 3(1)(iii), ie, for services such as BAS, the relevant factor to determine whether it is export or not is the location of the service receiver and not the place of performance - In the present case, the Appellant as an agent of Wacker, Germany procured orders and passed it on to the principal in Germany. Thus, the benefit accrued to the principal in Germany. Thus, as per the clarification cited, the services rendered by the Appellant would be 'Export of Service' and hence not liable to service tax. The demand of service tax along with interest is not sustainable in this case - there is no suppression involved in this case and penalty imposed in the impugned order set aside - The department is fully aware of the fact of the Appellant receiving Commission from Wacker, Germany as is evident from the Spot Memo dated 15.09.2009 and also from the 'Agency Agreement'. thus, no penalty imposable in this case. Appeal allowed.
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