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M/s. Fifth Avenue Sourcing Pvt. Limited Versus CST, Chennai

2017 (9) TMI 895 - CESTAT CHENNAI

Classification of services - services rendered by the appellant with respect to foreign based clients - Business Auxiliary Service or otherwise? - Held that: - The Tribunal in the case of Fifth Avenue [2009 (3) TMI 133 - CESTAT, CHENNAI] examining the identical set of facts and held that these services cannot be considered as BAS and should be treated as BSS, brought under tax liability only with effect from 01.05.2006 - The services are availed and consumed by the foreign based client and the c .....

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with effect from 01.05.2006, tax liability paid after 01.05.2006 is rightly to be appropriated under BSS. This is not being contested. However, for the period prior to 01.05.2006 no tax liability will arise and same is not paid by them. - The services rendered by the appellants are for tax liability under the category of BSS with effect from 01.05.2006. In so far as these services rendered for foreign based clients and consideration was received in convertible foreign exchange no tax liabili .....

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he appeal is against the order dated 20.01.2009 of the Commissioner of Service Tax, Chennai. The appellants are registered with the department for payment of service tax and were rendering taxable service under various categories. They are engaged in providing service to Indian garment exporters and their foreign buyers. Based on certain enquiries conducted with the appellants, Revenue initiated proceedings against them to demand and recover service tax not paid during the period 01.07.2003 to 3 .....

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dispute. The application of tax entry suitable for such services is in dispute. He drew our attention to the decision of the Tribunal in the case of one of their group company involved in identical set of activities viz., Fifth Avenue Vs. Commissioner 2009 (15) STR 387 (Tri.-Chen.). He submitted that the Tribunal after elaborately examining the nature of activities and contract, held that the appellants were liable to service tax under the category of Business Support Services (BSS) in terms of .....

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ctually rendered to a foreign based company and the consideration is also received in convertible foreign exchange. They have rendered services of identifying prospective vendors in India and various follow-up actions for which benefit accrued to the foreign based service recipient and consideration is received in convertible foreign exchange. The service is exported and not liable to tax. 2.2 As regards Annexure-B, it is submitted that they have paid service tax for the period post 01.05.2006 u .....

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Court in Indian Ship-owners Association Vs. UOI 2009 (13) STR 235 (Bom.) was affirmed by the Hon ble Supreme Court. 2.4 Regarding Annexure-D, the Ld. Counsel submitted that the service rendered are typically covered under BSS and taxable only with effect from 01.05.2006. Even otherwise, these services are rendered to the foreign based buyers of Indian garment manufacturers and the consideration which is sought to be taxed under Annexure-D is LC margin, the nature of which was explained by the b .....

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t of garments. 2. We submit that M/s. Fifth Avenue Sourcing Pvt. Ltd., Chennai-600 040 are receiving Transferable Letters of Credit established in their favour by the foreign buyers and transfer the same in favour of second 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 Pvt. Ltd. replace the Bill of Exchange and Invoice of the original shipper with their own bill of exchange an .....

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Pvt. 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. 05/9-9-2006 for Euro 4765.20 (c) Bill of Lading No. 701061400825 dated 16-9-2006 (d) Covering Schedule from Union Bank of India, Chennai Overseas Br. for .....

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sent to Current A/c. of Fifth Avenue Sourcing Pvt. Ltd. We give hereunder the workings of the amount remitted. Bill amount of first beneficiary. Fifth Avenue Sourcing Euro 5513.59 Amount realized Euro 5593.59 Foreign Bank charges Euro 220.00 Second Benc. East Clothings bill amount Euro 4765.20 Less: 50% of Foreign Bk. Charges (as per Inst. Of 1 Bene.) Euro 110.00 Balance remitted to Union Bank of India on 20.10.2006 Euro 4655.20 Amount realized Euro 5293.59 Less: Amt remitted to union Bank of I .....

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ible foreign exchange is fulfilled. 2.5 The Ld. AR supported the findings of the original authority relying on the decision of the Tribunal with reference to Fifth Avenue a group company of the appellant, the Ld. AR submitted that the Revenue had preferred an appeal against the said order which is admitted by the Hon ble Supreme Court and pending decision. However, no stay has been granted by the Apex Court. He submitted that the services examined in Annexure-B are basically towards commission r .....

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th Avenue (supra) examining the identical set of facts and held that these services cannot be considered as BAS and should be treated as BSS, brought under tax liability only with effect from 01.05.2006. We note that even in the category of BSS these services are to be considered as export as both the conditions referred to for export of services have been fulfilled in the present case. The services are availed and consumed by the foreign based client and the consideration has been paid by the s .....

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