TMI Blog2023 (12) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... is not liable to pay service tax under Business Auxiliary Service because the service provided by the appellant falls under the category of export of service. Further, the Hon ble High Court of Bombay in the case of THE COMMISSIONER OF SERVICE TAX, MUMBAI-VI COMMISSIONERATE VERSUS M/S. A.T.E. ENTERPRISES PVT. LTD. [ 2017 (8) TMI 1233 - BOMBAY HIGH COURT] has dismissed the appeal of the Revenue and upheld the decision of the Tribunal and held that the assessee is not liable to pay service tax as the services rendered by the assessee falls within the definition of export of services. The impugned order is not sustainable in law and therefore set aside - appeal allowed. - HON BLE Mr. S. S. GARG , MEMBER ( JUDICIAL ) And HON BLE Mr. P. ANJANI KUMAR , MEMBER ( TECHNICAL ) Ms. Krati Singh , Ms. Shreya Khunteta , Ms. Gulrukh Sidhu , Advocates for the Appellant Shri Siddharth Jaiswal , Shri Nikhil Kumar Singh , Authorised Representatives for the Respondent ORDER Per : S. S. GARG The present appeal is directed against the impugned order dated 31.12.2012 passed by the Commissioner of Service Tax, New Delhi wherein the Ld. Commissioner has confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms and conditions. 2.1 An audit of the Appellant was conducted for the period 2003-2008 wherein it was observed that the Appellant was receiving commission payments from overseas entities as a consideration for providing Business Auxiliary Services ( BAS ) under Section 65(19)(iv) of the Finance Act and was not discharging service tax on the same by treating them as export of services. Based on these observations, SCN dated 03.10.2008 was issued to the Appellant for the period 19.04.2006 to 28.02.2008 proposing the demand of Rs. 6,27,02,040/- on the ground that the BAS services rendered by the Appellant do not qualify as export of services as the same are being used by Indian customers in India. On the same lines, three show cause notices were also issued to the appellant for the period 01.03.2008 to 31.03.2010 proposing the demand of Rs. 7,56,41,681/-. 2.2 After following due process, the Ld. Commissioner adjudicated all four show cause notices vide common impugned order and confirmed the demand of Rs. 13,83,43,721/- alongwith interest under Section 75 of the Finance Act, 1994 and also imposed various penalties as mentioned above in Para No. 1. 2.3 Aggrieved by the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipient outside India and in the instant case, the services are received by Carrier Overseas and the benefit of the same has accrued to the overseas entities which are located outside India and therefore, the services are used outside India. 4.2 She also refers to Notification No. 6/2010-ST dated 27.02.2010 vide which amendment was made in Rule 3 of export of services and the condition of services provided from India and used outside India was deleted on account of pending litigation, further the clarification made by the department vide Circular dated 24.02.2009 shows that the legislature always had the intention that used outside India means the benefit for the same should accrue outside India and the recipient of the services must be located outside India. 4.3 She further submits that the scope and interpretation of services provided from India and used outside India has been considered in various judgements and this issue is no more res integra and it has been consistently held that the services rendered by Indian entity to foreign entity qualify as export of services as the actual recipient of the said services is the foreign entity even though the activity may ultimat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es provided from India and used outside India qualify as export of service which has been the subject matter of various litigation before the Tribunal and the Larger Bench of the Tribunal has settled the issue in favour of the assessee and this issue is no more res integra and has also been followed by coordinate benches of the Tribunal. The relevant portions of the decision of the Larger bench are reproduced herein below:- 1. xxxxxxxxx. A prospective customer in India is either approached by Arcelor India or a prospective customer contacts Arcelor India regarding stainless steel requirement, but in either case the request is forwarded by Arcelor India to the foreign steel mills with the technical requirements of the Indian customer. Once the foreign mills and the Indian customer come to an understanding on the terms and conditions of supply, a written contract is executed between the Indian customer and the foreign mills or a purchase order is placed on the foreign mills. The documents are prepared by the foreign mills in the name of the Indian customer and the Indian customer, in turn, pays the foreign mills. Thus, the goods directly pass from the foreign mills to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this expression was replaced w.e.f. 01.03.2007 by is provided from India and used outside India . The Circular dated 29.04.2009 issued by CBEC clarifies that the relevant factor is the location of the service receiver and not the place of performance and the phase used outside India is to be interpreted to mean that the benefit of the service should accrue outside India. The term used outside India , therefore, means that the service is provided to such a service recipient who is located outside India. It is the location of the service-recipient which determines where the service is used. The use of intangible services should be seen with respect to the location of the service recipient and not the place of performance. xxxxxxxxxxxx 47. Arcelor France and Arcelor India act as main agent and sub-agent for foreign mills and not as an agent or service provider for the customers in India. There is no contractual relationship between Arcelor India and the customers in India. Therefore, even though the goods in the form of steel products are being supplied to customers in India, the actual recipient of BAS provided by Arcelor India is Arcelor France. Arcelor France has us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfies condition (b) of rule 3(2) as payments for such service have been received in convertible foreign exchange. ( emphasis supplied ) 7. Further, we find that the coordinate bench of the Tribunal in the case of Orbit Research Associates Private Limited has also relied upon the larger bench decision of the Tribunal in the case of M/s Arcelor Mittal Stainless (India) Private Limited cited (supra) and held that the assessee is not liable to pay service tax under Business Auxiliary Service because the service provided by the appellant falls under the category of export of service. The relevant para is reproduced herein as under:- 28. Even if the 2005 Rules were to apply, the issue stands decided in favour of the appellant by a larger bench of the Tribunal in M/s. Arcelor Mittal Stainless (I) P. Ltd. vs. Commissioner of Service Tax, Mumbai-II 12. The factual position before the larger bench was that a prospective customer in India was approached by Arcelor India and the request was forwarded by Arcelor India to the foreign entity which ultimately supplied the goods to the Indian customers. For the service provided by Arcelor India to the foreign entity i.e. Arc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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