TMI Blog2014 (12) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... GAP International Sourcing (India) Private Limited vs. CST [2014 (3) TMI 696 - CESTAT NEW DELHI] Saving in Ocean Freight - Amount is given to the appellant by the foreign principal as an incentive out of the freight saved by the principal. There is no service involved as the goods, for which facilities of appellant are availed, belong to the appellant. charging service tax there has to be a service provider and a service recipient. One cannot be held to be a service provider to one s own self. On the same issue of the appellant for a subsequent period adjudicating authority has dropped the demand. In view of these observations appeal of the appellant with respect to service tax on amount received from the principal on saving in ocean freight is required to be allowed. Demand of service tax on other activities - composit contract or not - Held that:- There is no evidence that the contract were artificially splited to avoid service tax. As the services are separate and service recipient in future could avail the services of a service provider from a service provider other than the appellant, therefore, it can not be held that all the independent and separate contracts represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -DEL.] (c) Lenovo (India) Pvt. Limited vs. CCE - [2010 (20) STR 66 (Tri.)] (d) Blue Star Limited vs. CCE - [2008 (11) STR 23 (Tri.)] (e) ABS India Limited vs. CST - [2009(13) STR 65 (Tri.)] (f) Shri Mahesh Agarwal vs. CST - [2011-TIOL-1666-CESTAT-AHM] (g) Pratap Singh Sons vs. CCE - [2007 (5) STR 389] 2.2. With respect to service tax on the amount received by the appellant as a distributor, it was argued by learned advocate that appellant is purchasing the goods from the principal CFI and selling the same to buyer in India. That if certain goods remain unsold then those would be the property of the appellant and loss incurred in those transactions will also be borne by the appellant. That the distribution fee received by the appellant cannot be considered as Business Auxiliary Services; That appellant is unloading its own cargo and this activity cannot be considered as a provision of service. 2.3 That a consideration received by the appellant from its principal CFI is on account of ocean Freight Saving Income and is not with respect to any Cargo Handling services rendered. 2.4 That with respect to providing Customs Clearance services, Port Services and T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri J. Nagori (AR) appearing on behalf of the Revenue defended the order passed by the adjudicating authority. He made the bench go through Para 21.7 of the OIO dated 27.10.2011 to emphasis that for export of services the services rendered were also required to be performed outside India. That once services are provided in India then Business Auxiliary Services provided can not be considered as export of services. Learned AR made the bench go through Para 22.5 of the OIO to argue that no evidence is available on record that imported goods are the property of the appellant hence, Ocean Freight Saving income is nothing else but consideration for providing Cargo Handling Services. That appellant deliberately entered into separate contracts with the principal with reference to Clearing and Forwarding, Customs Clearance, Port Clearance and Transportation. That all the four contracts have to be considered as one composite contract for charging service tax under Clearing and Forwarding Services. 4. Heard both sides and perused the case records. As the main appeal itself is being disposed of the extension of stay application is allowed and appeal is taken up for disposal. Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmending the teams to be engaged in logistic work like transportation, clearing and forwarding etc. for export of the purchased products out of India. The department was of the view that the services being rendered by the appellant are Business Auxiliary Service covered by Section 65 (105) (zzb) readwith Section 65 (19) of the Finance Act, 1994. However, the Department was of the view that since the service has been rendered in India and is not export of service in terms of Export of Service Rules, 2005, the appellant would be liable to pay service tax in respect of the same. There is no dispute that the appellant for providing the above mentioned services to M/s GAP, U.S.A. received the remuneration from them in convertible foreign exchange. The dispute is only on the point as to whether the services provided by the appellant are export of service or not. After issue of show cause notice dated 10/01/08, the Jurisdictional Commissioner vide order-in-original dated 01/9/08 confirmed the service tax demand of ₹ 5,66,98,112/- alongwith education cess for the period from 19/4/06 to 31/5/07 and also the interest thereon under Section 75 of the Finance Act, 1994 and beside this, im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the business of the company located abroad, it would be export of service. 8.6 In view of the above discussion, the Boards Circular No. 141/10/2011 dated 13/5/11 clarifying that for the period prior to 27.02.2010, the condition regarding used outside India also needs to be independently satisfied for availing the benefit of export and that effective use of advertisement services shall be the place where the advertising material is disseminated to the audience though the actual benefit to my finally accrue to the buyer who is located at another place is not only not in accordance with the provisions of Rule 3 (1) of the Export of Service Rules, 2005, but is also contrary to the law laid down by the Apex Court in the case of All India Federation of Tax Practitioners (supra) and Association of Leasing and Financial Service Companies (supra), as a service which has not been consumed in India, cannot be taxed in India. 5.1 In view of the above settled proposition of law services rendered by the appellant under Commission Sales Agreement and Non-exclusive Distributor Agreement , pertaining to Distribution Fee/ Agency Fee, have to be considered as export of services and no ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
