TMI Blog2018 (2) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ch service flowing to Saudias business - appeal allowed - decided in favor of appellant. - ST/00299/2009 - 42881/2017 - Dated:- 22-9-2017 - Smt. Sulekha Beevi C.S, Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) For the Appellant - Ms. Shanmuga Priya, Adv. For the Respondent - Shri K. Veerahbadra Reddy, JC (AR) ORDER Per: Bench M/s. Shireen Travel Ltd., is a General Sales Agency (hereinafter referred to as GSA ) for Ethiopian Airlines and the transactions are covered by an agreement. The assessee is registered with the Service Tax Department under the category of service-Air Travel Agent. In terms of the GSA agreement, the appellant is permitted to have their office in Tamil Nadu, Andhra Pradesh, Karnataka and Kerala (Specified territory - within India). The commercial services to be rendered by the GSA are specified in the agreement. The agreement portion under the caption 'Commission to GSA' contains various commissions applicable to GSA. The Ethiopian Airlines shall pay GSA normal and Overriding Commission (hereinafter referred to as ORC ) for Air transportation over the service of Ethiopian Airlines sold only in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the case of M/s. J.B Boda and PSA SICAL Terminal Ltd., Vs Commissioner of Customs, Tuticorin reported in 2004 (165) E.L.T. 109 (Tri. -Chennai) and also in the cage of Indian Engineering Industries Ltd., Vs Commissioner of Central Excise, Jaipur reported in 2011 (24) S.T.R. 683 (Tri. -New Delhi). Learned advocate also further submits that the issue is squarely covered by the decision of the Tribunal in the case of M/s. Arafaath Travels Pvt. Ltd. in Final Order No.41400-41407/2017, dated 04.08.2017. The decision of this Hon'ble Tribunal in the case of M/s. Arafaath Travels Pvt. Ltd, (supra) has relied upon the decision of the Apex Court in the case of J.B. Boda and the decision of the High Court of Madras in the case of M/s. Supasesh General Insurance Services, wherein, it has been held that when out of the total payment made by the insurance/broker in India to the foreign insurer, the same was reduced to the extent of the brokerage and remaining amount was remitted to foreign insurer in foreign exchange and such Indian rupees was obtained in view of foreign exchange the same will be deemed to be convertible exchange. 2. On the other hand, learned Authoris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interline traffic agreements. Soliciting and promoting of passenger air transportation is permitted to be done by the appellants on all lines awarded out by Saudia. Similarly, in the General Sales Agreement for Cargo entered into between the Saudi Arabian Airlines Corporation, Jeddah Office and the appellants, like air passenger transportation, the appellants in the GSA Agreement for cargo is similarly required to provide commercial services to Saudia including soliciting, promoting and selling cargo and mailing transportation for Saudia and assisting in all operations to encourage traffic agreement of Saudia's lines. Evidently, the commercial services provided by the appellants, inter alia, soliciting, promoting and selling passenger air transportation and cargo and mail transportation for Saudia is very much a Business Auxiliary Service, ordered by Saudi Arabian Airlines, Jeddah, to benefit all such service flowing to Saudia's business. 8. Pursuant to number of disputes that had arisen on the condition used outside India, the CBEC had found it necessary to issue a Circular, dt. 11/05/2009-ST, dt 24.02.2009. The CBEC has advised in para-3 of the circular, that the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in the case of M/s. Trans Lanka Air Travel Pvt. Ltd. Vs. CST Chennai - 2007 (7) STR 476 (Tri-Chennai). While this maybe so, however, the appellants have argued that ETA Travels decision has been stayed by the Hon'ble High Court of Madras in C.M.A. No.2359/2007, vide order dt 26.10.2007. It has been confirmed by Revenue that the matter has still not been decided by Hon'ble High Court We also note that the very same High Court of Madras, which is the jurisdictional High Court for this Tribunal, in a recent judgment in the case of M/s. Suprasesh General Insurance Services Brokers (P) Ltd. [2015] 62 taxmann. com 364 (Madras) has addressed the very same controversy. The facts in M/s. Suprasesh are that appellant therein did not pay service tax for arranging reinsurance for Indian insurers from foreign reinsurers through foreign brokers on the ground that services were provided to a foreign company located outside India, therefore, it amounted to export of service. Department argued that assessee's services were provided to Indian insurance companies and payment was also received in Indian rupee. Hence, it was not an export of service for the purpose of Rule 3 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on decision in ETA Travels (supra) has taken a contrary view, However, by the principle of stare decisis this Tribunal is enjoined to follow the law laid down by the jurisdictional High Court of Madras in the case of M/s. Suprasesh General Insurance Service cited (supra). We are aware that the M/s. Suprasesh judgment has been appealed against by the department and the Hon'ble Apex Court after condoning the delay has issued notice, as reported in 2016 (43) STR J22 (SC), however, has not stayed the M/s. Suprasesh judgment has been ordered by the Hon'ble Apex Court, we intend to follow the ratio thereof as laid down by the High Court of Madras. 12. No doubt, the proviso in Rule 3(3) of Export of Service Rules, 2005 does require that the payments are received in convertible foreign exchange. But viewed in the light of decisions discussed supra, and in particular, that of the Hon'ble Apex Court judgment in M/s. J.B. Boda Company (supra) and that of the Hon'ble High Court of Madras in M/s. Suprasesh General Insurance Services (supra), even when the said payment to the appellant has been received in Indian rupees, however, there is a saving of foreign exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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