Custom, Excise & Service Tax Tribunal
Abacus Distribution Systems (India) ... vs Commissioner Of Service Tax, Mumbai I on 20 June, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal Nos. ST/688/11, 298/12 & 596/12 (Arising out of Order-in-Original No. 11/M-I/2011 dated 14.09.2011 & Order-in-Original No. 44-45/07-08/2012 Commr/KS/ST dated 9.2.2012 both passed by Commissioner of Central Excise, Mumbai I, .) For approval and signature: Honble Mr.S.S. Kang, Vice President Honble Mr. P.S. Pruthi, Member (Technical) ==========================================================
1. Whether Press Reporters may be allowed to see : No 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 :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
========================================================== Abacus Distribution Systems (India) Pvt Ltd Appellant (Represented by: Mr. Ravi Kumar Yanamandra, C.A.) Vs Commissioner of Service Tax, Mumbai I Respondent (Represented by: Mr. K.S. Mishra, Additional Commissioner (AR)) CORAM:
Honble Mr.S.S. Kang, Vice President Honble Mr. P.S. Pruthi, Member (Technical) Date of Hearing : 20.06.2014 Date of Decision: 20.06.2014 ORDER NO..
Per: S.S. Kang
1. Heard both sides.
2. Common issue is involved. Therefore the appeals are being taken up together.
3. In the present case demands were confirmed with interest and penalties imposed on the ground that during the period in dispute i.e. July 2003 to March 2010 the appellants provided Business Auxiliary Service and had not paid the appropriate service tax.
4. Brief facts of the case are that the appellants are undertaking marketing and promotion of Computer Reservation System (CRS) Software by M/s Abacus Singapore, the foreign entity vide Agreement dated 06.06.1996. The said software performs various functions including airline seat reservations, schedules, booking for a variety of air, car and hotel services, automated ticketing and fare displays. The appellant is appointed as National Marketing Company to provide services for the marketing and promotion of Abacus CRS Software in India.
5. Revenue is of the view that the activity undertaken by the appellant amounts to providing Business Auxiliary Service.
6. We find that this issue is now settled by the decision of the Tribunal in the case of M/s Acquire Services Pvt Ltd vs CST, Delhi in appeal No. 841/2010 vide final order dated 3.6.2014 whereby a demand which was confirmed on similar grounds were set aside by the Tribunal and the Tribunal held as under:-
21. The assessees provided services amounting to marketing of CRS, conceived, developed and owned by overseas entities, in India, by employing computer processes amounting to data processing. This the assessees did by processing information/data generated by their accredited travel agents in India and uploading the same to overseas located computer systems, which maintain and process the master data of the overseas entities. Assessees also identify and provide access to relevant segments of travel related data in the CRS to local travel agents by acting as an interface with the overseas computer systems and the composite data maintained and processed therein, by computer data processing.
22. In our considered view services provided by assessees to the overseas entities (Amadeus/Galileo) clearly amount to promotion or marketing of CRS services of the overseas entities (a BAS), but nevertheless falls outside the ambit of BAS as defined, since these services were provided by employing computer data processing, an excluded component.
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26. Another issue is whether services provided by assessees amount to export of services, within the ambit of the 2005 Rules. The Larger Bench of the Tribunal in Paul Merchants Ltd vs CCE, Chandigarh; followed in M/s GAP International Sourcing (India) Pvt Ltd vs CST and in the recent decision dated 13.03.2014 in M/s Alpine Moduler Interior Pvt Limited vs CST (Adjudication, New Delhi, explains, in a BAS context, that where the service recipient is located outside India; this taxable service is delivered and used outside India; and payment of such service provided outside India is received by the India service provider in convertible foreign exchange, the service falls within the ambit of the 2005 Rules; and is admissible to benefits thereunder. The decision of the Larger Bench in Paul Merchants Limited, particularly in the context of the facts on the basis of which the said decision was pronounced, explain the scope of relevant provisions of the 2005 Rules. From the decisions referred to supra it is clear that activities of assessees fall within the scope of the 2005 Rules. Consequently, there is no liability to service tax.
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31. Conclusions:
We hold that:
(a) Services provided by assessees during 01.07.2003 to 01.05.2006 fall outside the ambit of BAS; and
(b) Both prior and subsequent to 01.05.2006 (covering the entire periods in issue), assessees are entitled to the benefits under the Export of Service Rules, 2005. Consequently, appeal preferred by assessees are liable to be allowed.
7. In view of the above decision of the Tribunal which is squarely applicable to the facts of the present case, the impugned orders are set aside and the appeals are allowed.
(Dictated in Court.) (P.S. Pruthi) Member (Technical) (S.S. Kang) Vice President rk 5