Custom, Excise & Service Tax Tribunal
M/S. K.G. Denim Ltd vs Cce, Salem on 18 June, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
ST/S/416/2010 & ST/716/2010
(Arising out of Order-in-Appeal No.109/2010-ST(SLM) dated 19.8.2010 passed by the Commissioner of Central Excise (Appeals), Salem)
For approval and signature:
Honble Shri P.K. Das, Judicial Member
Honble Shri R. Periasami, Technical Member
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 should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether the Members wish to see the fair copy of the Order?
4. Whether order is to be circulated to the Departmental authorities?
M/s. K.G. Denim Ltd. Appellant
Vs.
CCE, Salem Respondent
Appearance Shri K.S. Venkatagiri, Advocate, for the Appellant Shri K.P. Muralidharan, Supdt. (AR) for the Respondent CORAM Honble Shri P.K. Das, Judicial Member Honble Shri R. Periasami, Technical Member Date of Hearing: 18.06.2014 Date of Decision: 18.06.2014 Final Order No.40481/2014 Per P.K. Das After hearing both sides, we find that the issue involved in this appeal lies in a narrow compass and therefore after disposing the stay application, we proceed to take up the appeal.
2. The applicants are engaged in the manufacture and export of readymade garments. In the present case, there is a demand of service tax of Rs.16,11,753/- for the period 18.4.2006 to 12/2008 on the charges paid by them to the foreign service providers as under:-
S. No. Taxable Service Activity Demand (Rs.)
1.
Business Exhibition Service 65(105)(zzo) The services provided to an exhibiter by the organizer of the business exhibition abroad 11,63,557
2. Business Auxiliary Services 65(105)(zzb) Processing of textile materials for chemical wash 1,83,427
3. Technical Inspection and Certification Services 65(105)(zzi) Testing and certification of textile samples done by M/s. Testes Zurich, Switzerland 2,64,769 Total 16,11,753
3. After hearing both sides and on perusal of the records, we find that the demand of tax under Business Exhibition service and Technical Inspection and Certification Service, the Tribunal, in the applicants own case, by Final Order No. 40042/2014 dated 21.1.2014 set aside the impugned order and allowed the appeal filed by the appellant. The relevant portion of the order is reproduced below:-
2. There are two short issues involved in this appeal. They are:-
(a) Whether there is service tax liability under Section 66A of Finance Act, 1994, on the appellant as a recipient of service in respect of Business Exhibitions conducted abroad for which payments have been made by the appellants to parties located abroad.
(b) Whether there is service tax liability on the appellant under Section 66A of Finance Act, 1994 as a recipient of service in respect of Technical Inspection and Certification Service in respect of testing done abroad and payments made by appellants to parties located abroad.
3. It is seen from para 2.1 of the adjudication order that the payments made by the appellant were in respect of exhibitions conducted abroad. Similarly, from para 3.3 of the adjudication order, it is seen that the Technical Inspections were done outside India. Therefore, as per the provisions of the Rule 3(ii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, these two services are considered to be imported into India when the service provider is located abroad and service is performed in India. Since, these services are performed outside India there is no service tax liability on the services in view of the above provisions. The counsel for the appellant relies on the following decisions in support of his argument.
1. Paramount Communication Ltd. Vs. CCE, Jaipur 2012 (25) STR 76 (Tri. Del.)
2. Intas Pharmaceuticals Ltd. vs. CST, Ahmedabad 2009 (16) STR 748 (Tri. Ahmd.)
4. The learned counsel also submits that for a subsequent period, the Commissioner (Appeals) himself has allowed their contention and dropped the demand vide Order-in-Appeal No. SLM-ST-70-APP-2012 dated 15.11.2012 and prays that the appeal may be allowed.
4. Regarding the demand of tax on processing of Textile materials for chemical wash under Business Auxiliary Service, the learned counsel submits that such service is exempted vide Notification No.14/2004-ST dated 10.9.2004. It is seen that Notification No.14/2004-ST exempted taxable service provided to a client by a commercial concern in relation to the business auxiliary service insofar as if it is in relation to textile processing. The learned AR submits that they have not claimed this benefit before both the authorities below and it is a new point before the Tribunal and therefore it should not be considered at this stage.
5. On perusal of the adjudication order, we find that on scrutiny of the records of the appellants, it was noticed that the appellant had paid the amount towards processing of textile materials for chemical wash charges to M/s. Testex, Swiss, Glancario and Reni Hendriks, Holand. So, there is no dispute of the fact that the appellant paid the charges for textile processing. Hence, they are eligible for exemption benefit under Notification No. 14/2004-ST dated 10.9.2004, as amended. In the present case, there is no dispute of the facts and therefore, in the facts and circumstances of the case, we find that the appellants are eligible for the exemption benefit.
6. In view of the above discussion, we set aside the impugned order and allow the appeal filed by the appellant, with consequential benefit, if any. The stay application is disposed of.
(Dictated and pronounced in open court)
(R. PERIASAMI) (P.K. DAS)
Technical Member Judicial Member
Rex
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