TMI Blog2017 (12) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee by the contract awarding party is in the form of earnest money. Thus the same is not liable to tax. It is also found from the certificate issued by the Chartered Accountant that the aseessee has discharged service tax liability on the entire amount of such advances. We thus find no reason to hold that the said amount is liable to be taxed at the time of receipt. Demand on retention money - Engineers sent abroad - export of service - Held that: - it is not in dispute that the services were rendered abroad. It is also not in dispute that the main contractor of the assessee received the consideration in foreign currency who in turn made payment to the assessee. In such case we find that the services rendered by the assessee falls under the Export of service which is eligible for exemption from service tax - assessee is not liable for payment of service tax on services rendered abroad. Appeal dismissed - decided against Revenue. - ST/17/12 & ST/21/12 ST/CO/46/12 - A/90726-90728/17/STB - Dated:- 13-11-2017 - Shri Ramesh Nair, Member ( Judicial ) And Shri Raju, Member ( Technical ) Ms. P. V. Shekhar, Jtd. Commissioner (A.R.) for Appellant/Respondent Shri V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide India to their sister concern. Hence the present appeals by the assessee against confirmation of demand and by the revenue against dropping of demands. 4. Shri V. Sridharan, Ld. Counsel appearing for M/s Thermax submits that the service tax demand has been wrongly confirmed against them. He submits that their customer in terms of the condition of the contract pays generally 10% of the contract value as advance cum security payment and they in turn give equivalent amount of Bank Guarantee to their customer. The customer has lien over the said bank guarantee till completion of the contract. Both the advance and the bank guarantee are in the nature of security deposit to ensure contractual commitment of each other. They raise invoice on their customer on the basis of stage of completion of contract and adjust the so called proportionate advance against the invoice raised on the customer based on the stage of completion of service. They pay service tax on total invoice value at the time of raising of invoice. Thus ultimately service tax stands paid by them on the so called advances at the time of raising of final invoices. He also submits that during the impugned period the paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... broad and qualify as Export of Service. The consideration for the said contracts was received by M/s Thermax Ltd in convertible Foreign exchange. He relies upon orders in case of Suprasesh General Insurance Services Brokers P. Ltd. Vs. CST - 2015 TIOL 2225 HC- MAD STQ and in case of Paul Merchants Vs. CCE - 2012 TIOL 1877 CESTAT DEL . He submits that they are secondary service provider to the primary exporter. He relies upon CBEC Circular No.56/5/2003 ST dt. 25.04.2003 that they do not have any service tax liability. He also submits that the demand is hit by limitation of time bar as there is no suppression of facts and no penalty is imposable. 5. On the other hand, Ms. P.V. Shekhar, the ld. Joint Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order in case of demand on Advances. She submits that it is not denied by the assessee that advance is part of consideration. That the order in case of Thermax Instrumentation supra needs reconsideration as the advance in the contracts is not in the nature of Earnest money. That in case of M/s Larsen Toubro Ltd - 2016 TIOL 167 DEL , it was held by the Tribunal that service tax is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me is not liable to tax. It is also found from the certificate issued by the Chartered Accountant that the aseessee has discharged service tax liability on the entire amount of such advances. We thus find no reason to hold that the said amount is liable to be taxed at the time of receipt. It became the part of consideration only when it was proportionately included in the stage wise completion of work for which invoices were raised and service tax was paid by the assessee. Even if it is assumed that the said amount was not in the form of earnest money but was received as Advance in that case also no service tax could have been demanded at the time of receipt as the same was not taxable. In case of M/s Thermax Insulation Ltd. Vs. CCE - 2015 TIOL 2736 CESTAT MUM the Tribunal held that advance cannot be considered as receipt towards taxable service as it is an obligation on the part of the customer of the mutual commitment between the two parties to honour the contract. Similarly in case of CCE, LUDHIANA Vs. J.R. Industries - 2009 (16) STR 51 (TRI DEL) it was held that when service was not provided the advance receipt cannot be taxed. We thus hold that there is no service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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