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2016 (7) TMI 1209 - CESTAT NEW DELHI

2016 (7) TMI 1209 - CESTAT NEW DELHI - 2016 (45) S.T.R. 120 (Tri. - Del.) - Export of services or not - place of performance is in India - Business Auxiliary Service (BAS) and Business Support Service - services were provided to foreign customers - manpower recruitment or supply agency service - Held that:- when the person on whose instructions the services, in question, has been provided and is located abroad, the destination of services, in question, has to be treated abroad. The destination h .....

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the appellant. In CCE vs. Computer Sciences Corporation India Pvt. Ltd.(2014 (11) TMI 125 - ALLAHABAD HIGH COURT) the Tribunal held that for tax purposes the service provided must be by a manpower recruitment agency and such a service has to be in relation to supply of manpower. In CCE vs. Arvind Mills Ltd. (2014 (4) TMI 132 - GUJARAT HIGH COURT), the Hon’ble Gujarat High Court held that deputation of employees from one company to another does not involve profit or finance benefit there is no r .....

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r. Satish Chandra, President And Shri B. Ravichandran, Member (Technical) Shri B.L. Narsimhan, Advocate for the appellant Shri Ranjan Khanna, Authorized Representative (DR) for the Respondent ORDER Per. B. Ravichandran The appeal is against order dated 31/3/2013 of Commissioner of Central Excise, Delhi II. The appellants were registered with the Department for discharging service tax under the categories of Business Auxiliary Service (BAS) and Business Support Service. Consequent upon audit of t .....

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anies. The second point is regarding non-payment of service tax under the category of manpower recruitment or supply agency service w.r.t. certain employees who were seconded to the appellant by the foreign companies. The service tax liability of ₹ 10,60,90,293/- and ₹ 3,61,77,248/- respectively were demanded from the appellant covering the period 2006 to 2011. On conclusion of the proceedings, the Original Authority confirmed the demand of the said amounts and imposed penalty of equ .....

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tion to identify the requirement of products of foreign companies in India as well as to create better visibility of the brand in India. The appellants assisted EADS France and EADS GmbH in the production of annual status of the local market and also on competition. Research of local market, collection of information, analysis of such information etc. is done on regular basis. The appellants also help in liaison work and assisting in holding event and seminar organized by EADS group in India. Fo .....

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reported in 2013 (29) S.T.R. 257 (Tri. Del.) ; (ii) Microsoft Corporation (I) Pvt. Ltd. vs. CST, New Delhi reported in 2014 (36) S.T.R. 766 (Tri. Del.) and (iii) Gap International Sourcing (India) Pvt. Ltd. vs. Commissioner reported in 2015 (37) S.T.R. 757 (Tribunal). (4) for the period post 27/2/2010 the appellants fulfilled the conditions for export of service and there is no dispute in this regard. The service has been provided to a recipient located outside India and payment has been receive .....

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imbursement cost for employees for secondment in India cannot form part of the gross value of the service imported by the appellant from foreign parties. There is no consideration charged by the foreign companies for the alleged service. It is only the cost of salary/wages which are reimbursed by the appellant ; (7) Reliance was placed on :- (i) CCE vs. Computer Sciences Corporation India Pvt. Ltd. reported in 2015 (37) S.T.R. 62 (All.) ; (ii) CCE vs. Arvind Mills Ltd. reported in 2014 (35) S.T. .....

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ce tax liability arises the whole tax amount is available for credit and as such the whole exercise is revenue neutral. 3. The learned AR contested the submissions of the appellant. He submitted that the case laws relied on by the appellant were examined by the Original Authority and he came to the conclusion on tax liability after perusing the nature of agreement. He supported the findings of the lower Authority. 4. We have heard both the sides and examined the appeal records. On the first issu .....

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greements do not have any office in India. These activities carried out by the appellant where services which are actually received and used by the foreign companies. The conditions of Rule 3 (1) alongwith sub-Rule (2) of Export of Service Rules, 2005 have been fulfilled in the present case by the appellant. The Original Authority recorded that though the order for providing impugned services came from foreign companies the said services were delivered to and used by customers of foreign company .....

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are pending before Hon ble Supreme Court. 5. On the first issue relating the appellants liability under BAS it is now a well settled legal position that the service involved is in fact exported out of India and there is no service tax liability. In M/s Paul Merchants Ltd. vs. CCE, Chandigarh reported in 2013 (29) S.T.R. 257 (Tri. Del.) it is held that what constitutes export of service is to be determined strictly w.r.t. the provisions of Export of Services Rules, 2005. It is the person who req .....

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vice. In Microsoft Corporation (I) Pvt. Ltd. vs. CST, New Delhi reported in 2014 (36) S.T.R. 766 (Tri. Del.), the Tribunal held that the Business Auxiliary Services of promotion of market in India for foreign company amount to export of services. The Export of Services Rules, 2005 is considered as destination based consumption tax in accordance with declaration of law by the Hon ble Supreme Court in All India Federation of Tax Practitioners vs. Union of India reported in 2007 (7) S.T.R. 625 (S.C .....

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The second point of dispute regarding service tax liability of the appellant, again on reverse charge basis, under the category of manpower recruitment and supply agency service , we find that the other parties of the agreement located abroad are not falling under the category of Manpower Recruitment and Supply Agency . The impugned order nowhere established that the foreign entities are involved in such business of manpower supply. The appellant have a strong case of this ground alone. Further, .....

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