Custom, Excise & Service Tax Tribunal
M/S. Simpra Agaencies Pvt. Ltd vs Cce, Delhi-Ii on 28 March, 2014
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision: 28.03.2014
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Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?
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Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
Service Tax Appeals Nos. 479-480/2012
(Arising out of Order-in-Appeal No.05 & 06/S.Tax/D-II/2012 dated 24.01.2012 passed by the Commissioner of Central Excise (Appeals), Delhi-II)
M/s. Simpra Agencies and
M/s. Simpra Agaencies Pvt. Ltd. Appellants
Vs.
CCE, Delhi-II Respondent
Appearance:
Shri A.K. Batra, CA & Shri Agrish Bhasin, Advocate - for the appellant. Shri Govind Dixit, DR - for the respondent. Coram :
Honble Mr. Justice G.Raghuram, President Hon'ble Mr. Rakesh Kumar, Member (Technical) Final Order No. 51738-51739/2014 / 28.03.2014.
Per Rakesh Kumar:
The facts giving rise to these appeals are, in brief, as under:-
1.1 The appellant, M/s. Simpra Agency act as an agent for several foreign companies for procuring supply orders for them for which they get commission in foreign exchange. Besides this, they also provide the services of testing, commissioning and after-sale warranty service on behalf of their foreign clients for which they get remuneration in convertible foreign exchange. In this regard, they had agreement with M/s. Secheron SA and M/s Gimota AG. There is no dispute that the service provided by them are Business Auxiliary Service taxable under Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 1994. The appellant discharged service tax liability for these services provided to their foreign clients and treating these services as export of their services, they filed rebate claim ofRs.42,43,288/- for the period from 1.4.2010 to 30.11.2010 in terms of notification no.11/2005-ST dated 19.4.2005 issued under Rule 5 of the Export of Service Rules, 2005. This rebate claim was filed by them on 9.2.2011 in the prescribed form ASTR-I. The rebate claim was considered by the Assistant Commissioner who vide order dated 3.6.2012 rejected the same holding that the services provided by the appellant are not export of service. The Assistant Commissioner also observed that the appellant have not submitted the copies of their agreement with M/s. Secheron SA, Switzerland and M/s Gimota AG, Switzerland to whom the output service invoices had been provided. The Assistant Commissioner also held that the word recipient is not defined in the Export of Service Rules, 2005 and that the recipient of service provided by the appellant are the Indian companies and not their foreign clients. He also observed that from the perusal of the copies of the FIRCs and credit advices submitted by the appellants, it is seen that FIRCs and credit advices do not contain the numbers and dates of invoices issued by the appellants against which the payment had been received and as such FIRCs and credit advices submitted by the appellant cannot be correlated with their invoices.
1.2 On appeal being filed to the Commissioner against this order of the Assistant Commissioner, the Commissioner (Appeals) vide order-in-appeal dated 24.1.2012 dismissed the appeals. Against this order of CCE(Appeals), Appeal No. ST/479/2012 has been filed.
1.3 M/s.Simpra Agencies Pvt. Ltd., a sister concern of M/s.Simpra Agency filed rebate claim of Rs.4,34,099/- before the Asstt. Commissioner for the period from 01.04.2010 to 30.11.2010 under Rule 5 of the Export of Service Rules, 2005. This rebate claim was filed on 28.01.2011 in form ASRA-I and the same was also rejected by the Assistant Commissioner on the same ground vide order-in-original dated 3.6.2011. Against this order of the Assistant Commissioner, the appellant filed appeal to the Commissioner (Appeals), who vide order-in-appeal dated 24.1.2012 dismissed the appeals, against which the appeal no.ST/480/2012 has been filed.
2. Heard both the sides
3. Shri A.K. Batra, CA & Shri Agrish Bhasin, Advocate, ld. Counsels for the appellants, pleaded that the service of procuring supply orders for their foreign clients M/s. Secheron SA, Switzerland and M/s. Gimota AG, Switzerland are Business Auxiliary Services covered by Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 1994, that other activity of the appellants providing of after-sale services, testing, commissioning, installation services, etc. on behalf of their two foreign clients is also covered Business Auxiliary Service as it is provision of service on behalf of clients, that the nature of the activity of the appellants is clear from their agreements with their clients i.e. M/s. Secheron SA, Switzerland and M/s. Gimota AG, Switzerland, that it is the clients of the appellants located at abroad, who are the recipient of the services covered under the Business Auxiliary Service and since the payment was received in convertible foreign currency, in terms of Rule 3(1) (iii) of Export of Service Rules, 2005 read with Rule 3 (2) ibid, the services have to be treated as export of service, that the issue involved in this case is covered in favour of the appellant by the judgments of the Tribunal in the case of Paul Merchants Ltd. Vs. CCE, Chandigarh reported in 2013 (29)STR 257 (Tribunal-Delhi) and also GAP International Sourcing (India) Pvt. Ltd. Vs. CST, Delhi reported in 2009 (15) STR 270 (Tribunal-Delhi), that since the service provided is export of service and payment for the service received in convertible foreign exchange, the appellant are eligible for rebate of the service tax paid on the same in terms of the Rule 5 of the Export of Service Rules, 2005 and that the Commissioners finding that the service provided by them are not export of service are not correct. He, therefore, pleaded that the impugned order is not correct.
4. Shri Govind Dixit, ld. Departmental Representative defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that copies of the agreement of the appellants with their foreign clients had not been produced before the original adjudicating authority.
5. We have considered the submissions from both the sides and perused the records.
6. In both the cases, the rebate claims under notification no.11/2005-ST issued under Rule 5 of the Export of Service Rule, 2005 have been rejected, In both the cases, though in course of proceedings before the Commissioner (Appeals) the agreements of the appellants with their foreign clients had been produced, the finding of the Commissioner (Appeals) is that the service rendered cannot be classified as Business Auxiliary Service and also the same cannot be treated as Export of Service. On going through the agreements of the appellants with their foreign clients, M/s. Secheron SA, Switzerland and M/s. Gimota AG, Switzerland, we find that function of the appellant is promoting the sales of their clients products in India, conducting market survey and, if required, conducting inquiries with regard to solvency and reliability of the clients and besides this, they are also required to provide after-sale warranty service in testing, etc. on behalf of their foreign clients to the buyers in India. These services are covered by the definition of Business Auxiliary Service as given in Section 65(105)(zzb) read with Section 65(19) and since, in view of the judgments of the Tribunal in case of Paul Merchants Ltd. Vs. CCE, Chandigarh reported in 2013 (29) STR 257 (Tribunal-Delhi) and GAP International Sourcing (India) Pvt. Ltd. Vs.CST, Delhi reported in 2009 (15) STR 270 (Tribunal-Delhi), the services provided by the Appellants have to be treated as export of service, the appellant would be entitled for rebate of service tax paid on the same in terms of notification no.11/2005-ST issued under Rule 5 of the Export of Service Rules, if the procedure prescribed in this notification has been followed and the conditions prescribed therein are fulfilled. The Assistant Commissioner has not gone into this aspect. In view of this, the impugned orders are set aside and the matters are remanded to the original adjudicating authority for examining the rebate claims in terms of the notification no.11/2005-ST issued under Rule 5 of the Export of Service Rules.
[ operative part already pronounced in open court] (Justice G. Raghuram) President (Rakesh Kumar) Member (Technical) Ckp.
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