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2018 (3) TMI 502

he appellants to provide service of co-ordinating the shipments and for liaison work. M/s.Wega has offered to pay 1.8% of the invoice value as remuneration for the services - Though the amount is paid by the local manufacturers to the appellants, this amount belongs to M/s.Wega as the local manufacturers pays only 3.2% and retain the balance to be paid to appellant - the said amount is out of the .....

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oice value. The shippers were to pay commission of 5% to M/s.Wega International Ltd. The shippers paid 3.2% on invoice value to M/s.Wega International and paid 1.8% to the appellants. The department was of the view that this commission of 1.8% received is subject to levy of service tax. Show Cause Notice was issued proposing to recover the service tax alongwith interest and also for imposing penal .....

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ega. Out of this only 3.2% was paid by remittance to M/s.Wega and 1.8% was paid by the local manufacturer to appellant instead of being remitted to M/s.Wega and then being paid by M/s.Wega to appellant. The commission paid by Indian manufacturers was only out of the commission that they are bound to pay to M/s.Wega. Appellants were not under any obligation to provide services to the Indian shipper .....

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xable services. The department has raised the demand for the reason that commission is received in Indian Currency. The Hon ble Supreme Court in the case of J.B. Boda & Co. (P) Ltd. Vs CBDT [1997] 223 ITR 271 (SC) held that deducting the commission due before remitting the amount to foreign company should be treated as commission received in convertible foreign exchange. The Tribunal in the ca .....

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