Custom, Excise & Service Tax Tribunal
Commissioner Of Service Tax, New Delhi vs M/S Avery Dennison India Pvt. Ltd on 27 April, 2017
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017
COURT NO. I
Appeal No. ST/54355/2014
[Arising out of Order-in-Appeal No. 216/SVS/GGN/2014 dt. 28.04.2014 passed by the Commissioner of Service Tax, New Delhi.]
Date of hearing/decision: 27.04.2017
For approval and signature:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. Devender Singh, Member (Technical)
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Commissioner of Service Tax, New Delhi.
Appellant(s) VS M/s Avery Dennison India Pvt. Ltd.
:
Respondent(s) ======================================================= Appearance:
Sh. V. Gupta, AR, for the Appellant(s) Sh. Prateek Jain, Advocate for the Respondent(s) CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. Devender Singh, Member (Technical) FINAL ORDER NO. 60700/2017 Per : Ashok Jindal
Revenue is in appeal against the impugned order wherein the Ld. Commissioner has dropped the charge of demanding Service Tax under the category of Business Auxiliary Services under the reverse charge mechanism.
2. The facts of the case are that respondent is managing the purchase function of their overseas entities through their employees entailing the job of negotiation with suppliers placing of purchase orders and timely delivery of the raw material from the entire Asia Pacific Region including India. The view of the Revenue is that as these activities has been used by the service recipient located in India, therefore, the respondent has supplied these services in India, in that circumstances show cause notice was issued to demand the Service Tax under the category of Business Auxiliary Service under the reverse charge mechanism. The matter was adjudicated, the demand of service tax confirmed along with interest and various penalties were also imposed.
3. The said matter was carried out by the respondent before the Ld. Commissioner (A) who examined the issue and held that it is case of export of service as service recipients located outside in India and receiving services thereof. In that circumstances, Service Tax cannot be demanded from the respondent under the reverse charge mechanism. Aggrieved from the said order, the Revenue is before us.
4. Heard the parties and considered the submissions.
5. We find that the sole ground of filing of this appeal by the Revenue is stay order passed by this Tribunal in the case of Microsoft Corporation (I) (P) Ltd. Vs. Commr. of S.T., New Delhi on the identical facts, therefore, the impugned order to be set aside. We find that in the case of Microsoft Corporation (I) (P) Ltd. Vs. Commr. of S.T., New Delhi the final order has been delivered by this Tribunal reported in 2014 (36) S.T.R. 766 (Tri. Del.), wherein this Tribunal has observed by majority decision as under:
52.?Apart from the above, we note that there was identical issue was before the Bench of the Tribunal in the case of Gap International Sourcing (India) Pvt. Ltd. [2014-TIOL-465- CESTAT-Del]. Vide its detailed order and after considering the various decisions of the higher Court as also various circulars issued by the Board, it stand held that services of identifying the Indian customers, for procurement of various goods on behest of foreign entity is the service provided by a foreign entity and such service provided by a person in India is consumed and used by a person abroad. It has to be treated as export of services. I also take note of the Tribunals decision in the case of Vodafone Essar Cellular Ltd. v. CCE, Pune [2013-TIOL-566-CESTAT-Mum = 2013 (31) S.T.R. 738 (T)] wherein it stand held that when the services is rendered to third party at the behest of the assessees customers, the service recipient is assessees customer and not the third party i.e. his customers customer. As such, the services being provided at the behest of the foreign telecommunication services provided to a person, roaming India were held to be constituting export services under the Export of Services Rules, 2005. The said decision stand subsequently followed by the Tribunal in the case of CESTAT, Mumbai v. Bayer Material Science Pvt. Ltd. v. CST, Mumbai [2014-TIOL-1064-CESTAT-Mum]. Business Auxiliary services provided by the assessee to their members located outside India by marketing their product in India was held to be export of services inasmuch as the service was held to be provided to the foreign located person who was also paying to the assessee on such services in convertible foreign exchange. Therefore we hold that the issue has already been covered by the decision of Microsoft Corporation (I) (P) Ltd. Vs. Commr. of S.T., New Delhi (supra) and no Service Tax can be demanded from the respondent under reverse charge mechanism.
6. In that circumstances, we do not find any infirmity in the impugned order, the same is upheld. The appeal filed the Revenue is dismissed.
(Dictated and pronounced in the open court) Devender Singh Member (Technical) Ashok Jindal Member (Judicial) NS 4 Appeal No. ST/54355/2014-CHD