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TMI Blog2017 (2) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... its business, appellant had exported diamonds outside India under then existing Foreign Trade Policy; accrued certain benefits under FTP which they were entitled to transfer to any other entity by mentioning their name on the export documents such as invoice, shipping bills etc; they mentioned on the invoice and shipping bills the name of M/s Adani Exports based upon an understanding between appellant and M/s Adani Exports Ltd. for availing such export benefits, which were passed on Adani Export Ltd, appellant got 1% of the FOB value of the exported goods from Adani Exports Ltd. Revenue is of the view that this amount received from Adani Exports is liable to service tax under the category of Business Auxiliary Service in the hands of appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have certified that this amount paid by them to appellant is not in respect of any services. 4. Learned D.R. on the other hand would submit that any benefit which has accrued and passed on by appellant to Adani Exports is in respect of the services rendered towards the production or processing of the diamonds and diamond jewellery. It is his submission that appellant had processed and produced diamond and diamond jewellery on behalf of Adani Exports Ltd., otherwise there was no reason for appellant to transfer the export proceeds to Adani Exports Ltd. 5. We have considered the submissions made by both sides and perused the records. 6. The undisputed facts are appellant had manufactured integrated diamond and diamond jewellery and were e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not fall under the category of business auxiliary service . The provisions of Section 69 (19) of the Finance Act, 1994 which defines business auxiliary service as under:- "(19) "Business auxiliary service means any service in relation to- (i) Promotion or marketing or sale of goods produced or provided by or belonging to the client; or ii) Promotion or marketing of service provided by the client; or (iii) Any customer care service provided on behalf of the client; or (iv) Procurement of goods or services, which are inputs for the client; or[Explanation.- For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, inputs means all goods or services intended for use by the client] (v) Product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wellery. In the absence of any such evidence to indicate that Adani Exports Ltd., had availed the services of appellant for production or processing of goods, we find that the impugned order holding that appellant is producing or processing of goods on behalf of Adani Exports Ltd., is unsustainable. 6.2 Further, we find that the Hon'ble Supreme Court in the case of Commr. of I.T. Thiruvananthapuram v. Baby Marine Exports 2007 (211) ELT 12 (S.C.) had a occasion to consider a similar issue in respect of income tax in that case the respondent therein had claimed the reduction on the ground that they are selling the goods to export houses and hence they are entitled for a deduction to the extent of profits from the sale of marine products. Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X
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