TMI Blog2014 (2) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... ame in the cause title as "Commissioner of Service Tax, Chennai" instead of Commissioner of Central Excise, Chennai-III as the appellant falls under the jurisdiction of Service Tax Commissionerate. We allow the application with a direction to Registry to amend the cause title accordingly in all further proceedings. 2. Now, we take up stay petitions filed by appellant-assessee in three appeals. 3. The applicant is engaged in the business of identifying vendors for supply of garments to buyers located abroad. For supply of such goods, the buyers opened transferrable letters of credit in favour of the applicant. As per the terms of the contract between the applicant and the buyers abroad, the applicants were entitled for a commission based on the FOB value of the goods exported. This commission was realised by retaining a margin while transferring the letters of credit. 4. There has been a dispute in this matter between the applicant and Revenue on the question as to taxability of the margin on Letters of Credit retained by the applicant. Show Cause Notices have been issued periodically demanding tax on such amounts considering it as consideration for Business Auxiliary Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beneficiary/ies who would actually ship the goods as per LC terms and send the documents to us for substitution/submission to Issuing bank. M/s.Fifth Avenue Sourcing P. Ltd. replace the Bill of Exchange and Invoice of the original shipper with their own bill of exchange and invoice for a higher value (original Invoice value of the shipper Plus their Margin) and then the documents are presented to the LC Issuing bank by us for payment. Upon receipt of payment from the LC Issuing Bank, we transfer the amount of the second beneficiary's bill of exchange after deducting the Foreign Bank charges to the foreign bank account of the second beneficiary's bankers towards payment of their bill. The margin amount is credited to the first beneficary's (M/s.Fifth Avenue Sourcing P. Ltd.) current/EEFC account with us. This way, the entire transaction comes to its logical end. 3. We send herewith the photo copies of the following documents in respect of the captioned Bill, referred to in your letter. a) Bill of Exchange for Euro 4765.20 drawn by Second Beneficiary, East Coast Clothing Co. Ltd. Tirupur. b) Invoice No.05/09.09.06 for Eur 4765.20 c) Bill of Lading No.701061400825 dt. 16.9.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Auxiliary Service" and "Business Support Service", the issue whether the service is exported or not is to be decided with reference to location of recipient of service as per Rule 3 (1) (iii) of Export of Services Rules, 2005 and not based on place of performance as applicable to services listed in Rule 3(1) (ii). The Ld Advocate contests that their contract was with the foreign buyer and there is no contract between the applicant and local vendors other than through the transferred letters of credit and the commission payable is paid not by the local vendors but by the foreign buyers and hence the service recipient is the foreign buyer. The Ld Advocate for applicant relies on the following orders where stay petition was allowed without pre-deposit in similar cases:- (i) Gap International Sourcing (India) Pvt Ltd Vs. CCE 2009 (15) STR 270 (Tri-Del) (ii) M/s Kishore Kumar and Company (Exports) Pvt Ltd -2012-TIOL-622-CESTAT-BANG 9. Therefore, the advocate requests that appeals may be admitted without any pre-deposit. 10. Opposing the prayer, Ld. AR for Revenue submits that the dispute about classification is not material at stay stage because both under 'Business Auxiliary S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the service is seen as one rendered to the buyer the service appears to be more appropriately classified under Business Support Service as already decided by Tribunal in Fifth Avenue Vs. CCE reported at 2009 (15) STR 387 (Tri-Chennai). So at this stage the decision of the Tribunal in the said case and stay order in appellant s own case reported at 2011 (22) STR 55 (T) imply that the service was rendered to the foreign buyer and not to the local vendors. 15. We further note that Revenue has not brought on record any contract between the appellant and the local vendors. Copy of the transferred letter of credit, which may give some support to the grounds as argued by Revenue, has not been brought on record. Samples of Invoices raised by the vendors are part of the appeal papers. Corresponding invoices and Bills of Exchange raised by the applicant on the foreign buyer after adding the commission of the applicant are also on record. These documents are in conformity with the mode of transaction as described by Bank of India in letter dated 05-10-2007. Prima facie, we note that the invoices raised by the vendors were for the value of the goods and the vendors were satisfied with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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