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2018 (10) TMI 973 - AT - Service TaxBusiness Auxiliary Service - appellant acting as purchase agents, for overseas buyers of processed sea foods - export of services or not? - case of Revenue is that the appellants provided services falling under Business Auxiliary Service and that the consideration received by them was not in convertible foreign exchange and thus, are not exempted from payment of Service Tax. Held that:- The service provider i.e. the appellant is situated in India i.e. in a taxable territory. The recipients of the services, to whom the benefit of the services accrued, are located outside India. Therefore, it is evident that the service provided by the appellants is either provided to a person located outside India or the benefit of service accrued to a person placed outside India or it could be construed to be provided at a place outside India as the nature of Service Tax was held to be consumption-based destination Tax. Thus, the services were rendered by the appellant who is located in India and the beneficiary of the services was located outside India and such services were required to be treated as export of services for a harmonious construction of the legal provisions over the years. The appellants have successfully demonstrated that the commission due to them was received either directly in foreign exchange from foreign clients or in INR from Indian exporters from the expo proceeds. Therefore, it is clear that the remittance is received by the appellants is nothing but a portion of the export proceeds received by the exporter, though paid to the appellants in Indian Rupees. It is to be considered as receipt in foreign exchange only albeit is an indirect fashion - the amounts received by the appellants as commission required to be treated as to have been received in freely convertible foreign exchange. Time limitation - Held that:- The appellants obtained registration or payment of Service Tax in 2004 itself and intimated to the Department vide letter dated 03.12.2004 that their services qualifies as export and hence they are not collecting service tax and the same was followed by way of letter dated 10.11.2007. In view of the same, it is incorrect for the Department to allege suppression of facts with intention to evade payment of duty etc., for the purposes of invocation of extended period - Extended period cannot be invoked. Penalty - Held that:- The case of the Department does not stand on merits, the question of maintaining the penalty etc. does not arise at all. Appeal allowed - decided in favor of appellant.
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