TMI Blog2015 (8) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... vident that service tax was exempted during the relevant period for the services provided under Business Auxiliary Service if it relates to agriculture, printing, textile processing or education. The appellants are Textile manufacturer and exporters - The exemption of service tax under BAS was allowed in relation to four industries namely agriculture, printing, textile processing and education. Therefore, the appellant being textile industry, it is covered under the category "textile processing" in the notification. Appellants being the exporter of textile made ups as per the Foreign Trade Policy are not expected to export the taxes. Appellants pleaded that there was no suppression of facts with deliberate intention to evade payment of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. They availed the services of overseas commission agents for procurement of orders and paid commission. Show cause notices were issued to the assessees demanding service tax on the import of services under Business Auxiliary Services under reverse charge mechanism. The adjudicating authority confirmed the demands and interest and dropped penalties proposed under Section 76, 77 78. Against this order, both assessee and Revenue filed appeals before Commissioner (Appeals). The appellant-assessee contended the service tax demand and the Revenue filed appeal against waiver of penalty. Commissioner (Appeals) rejected bssoth assessees' appeals and the Revenue's appeal. 3. In respect of appellants, M/s.Texyard International (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The lower appellate authority had denied the exemption. As they are the textile manufacturer and exporters, the exemption under the above notification is not applicable to them. He further submits that as per Foreign Trade Policy Notifications for the Policy Period 2004-09, para 2.483 provides that all goods and services exported from India, the services received/rendered abroad shall be exempted from service tax. He submits that FTP policy at para 2.483 read with exemption Notification No.14/04, the government has consciously exempted service tax on Business Auxiliary Service during the relevant period on the impugned service availed. He further submits that the appellants are also eligible to get the refund under Notification No.41/07-ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manded under reverse charge on the commission paid to the overseas agents for export of finished goods. The Revenue filed appeal against setting aside of penalties by Commissioner (Appeals). The main issue in the present appeals is whether appellant-assessees are eligible to the benefit of exemption of service tax under Business Auxiliary Service under Notification No.14/2004-ST dt. 10.9.2004 and whether assessees are liable for penalty as contended by Revenue. Prima facie , we find that there is no dispute on the fact that the appellants are manufacturer-exporters and they manufacture textile made ups and export to overseas. They have engaged overseas agents and paid commission for procurement of export orders and the commission agency ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for textile processing. On careful reading of the above notification, it is evident that service tax was exempted during the relevant period for the services provided under Business Auxiliary Service if it relates to agriculture, printing, textile processing or education. The appellants are Textile manufacturer and exporters. The word textile processing referred in the notification is to be understood in a broader sense. The dictionary meaning of textile processing means sequence of operations or changes undergone and the definition of textile includes fabrics,fibre , yarn suitable for weaving into fabric . The exemption of service tax under BAS was allowed in relation to four industries namely agriculture, printing, textile processin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No.1/(RE/2008)/2004-2009 dt. 11.4.2008 all goods and services exported from India, services received/ rendered abroad wherever possible shall be exempted from service tax. Therefore, the demand is also hit by limitation and the extended period cannot be invoked. 8. It is further pertinent to mention that appellants are manufacturer-exporters. Service tax if any payable under reverse charge is permissible to be availed as cenvat credit and that may be refundable under Notification No.41/2007 unless otherwise deniable by law. The provision made in Central Excise Rules and Cenvat Credit Rules ensures that tax is not added to the cost of export so that Indian exporter can compete with overseas market. The Hon'ble Supreme Court in CC ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
