Custom, Excise & Service Tax Tribunal
M/S Covidien Healthcare India Private ... vs Cce, New Delhi on 9 January, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING : 09/01/2014. DATE OF DECISION : 09/01/2014. Service Tax Appeal No. 57174 and 57222 of 2013 [Arising out of the Order-in-Original No. 20-21/2012-13/1334 dated 31/01/2013 passed by The Commissioner of Central Excise, New Delhi.] For Approval and signature : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri Rakesh Kumar, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s Covidien Healthcare India Private Limited Appellant Versus CCE, New Delhi Respondent
Appearance S/Shri R. Murlidharan and Dheeraj Srivastava, Advocates for the appellant.
Shri Govind Dixit, Authorized Representative (DR) for the Respondent.
CORAM : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 50326-50327/2014 Dated : 09/01/2014 Per. Rakesh Kumar :-
The appellant is a group company of M/s Covedien Healthcare India Private Limited, Singapore formerly known as Tyco Healthcare Pvt. Limited, Singapore. They are engaged in providing marketing and, sales promotion services in respect of the products of their group company Covedien, Singapore for which they have entered into agreement with Covedien, Singapore. The appellant in terms of their agreement with M/s Covedien, Singapore get commission at the rate of 20% of the value of sales generated in India. The point of dispute is as to whether the service provided by the appellant to M/s Covedien, Singapore is to be treated as export of service and no service tax would be chargeable in term of Export of Service Rules, 2005 or whether it is to be treated as service provided and consumed in India and, hence, would attract service tax. The department being of the view that the services provided by the appellant to their overseas group company is not export of service, initiated proceedings for recovery of service tax alongwith interest and imposition of penalty. In this regard, two show cause notices dated 05/4/10 and 04/4/11 were issued for demand of service tax amounting to Rs. 1,72,39,464/- and Rs. 81,73,421/- for the period from June 2008 to March 2009 and April 2009 to March 2010 respectively alongwith interest and also for imposition of penalty. These show cause notices were adjudicated by the Commissioner, Central Excise, Delhi II by a common order-in-original No. 20-21/2012-2013 dated 31/01/13 by which the service tax demands mentioned above were confirmed alongwith interest and beside this, penalty was also imposed on the appellant under Section 76 of the Finance Act, 1994. Against this order of the Commissioner, these two appeals have been filed.
2. Shri R. Murlidharan and Shri Dheeraj Srivastava, Advocates, the learned Counsels for the appellant, pleaded that the services provided by the appellant to their overseas group company are Business Auxiliary Service taxable under Section 65 (105) (zzb) readwith Section 65 (19) of the Finance Act, 1994, that in terms of Rule 3 (1) (iii) readwith Rule 3 (2) of the Export of Service Rules, 2005, in respect of service covered under Section 65 (105) (zzb), the service provided by a person in India is treated as export of service when it has been provided in relation to business or commerce and has been received by a person located abroad and service has been used outside India in relation to business or commerce and payment for the service has been received in convertible foreign exchange, that all these conditions of Export of Service Rules, 2005 for treating the service, in question, as export of service are satisfied, in as much as the appellant, for the service provided by them to M/s Covedien, Singapore have received the payment in convertible foreign exchange and recipient of the service, a company located in Singapore - Covedien, Singapore has used this service in relation to its business, that just because the sales promotion activity is in India, the service cannot be treated as having been used in India, as this service has been used by M/s Covedien, Singapore for promoting their business, that the issue involved in this case is no longer res-integra and stands decided in favour of the appellant by the judgment of the Tribunal in the case of Paul Merchant Ltd. vs. CCE, Chandigarh reported in 2013 (29) S.T.R. 257 (Tri. Del.), and that in view of this, the impugned order is not sustainable.
3. Shri Govind Dixit, the learned Departmental Representative defended the impugned order by reiterating the findings of the Commissioner.
4. We have considered the submissions from both the sides and perused the records. The issue involved in this case stands decided in favour of the appellant by judgment of the Tribunal in the case of Paul Merchant Ltd. vs. CCE, Chandigarh (supra). In view of this, the impugned order is not sustainable. The same is set aside. The appeals are allowed.
(Operative part of the order pronounced in the open court.) (Archana Wadhwa) Member (Judicial) (Rakesh Kumar) Member (Technical) PK ??
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