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Judgment
This appeal is filed against order-in- appeal dated 15.5.2009 which upheld order-in-original dated 30.01.2008, in terms of which service tax demand
of Rs.26,69,580/- for the period April 2005 to December 2005 was confirmed under Business Auxiliary Service along with interest and penalties. The
demand was confirmed on the ground that the appellant received commission of Rs.2,61,72,355/- in foreign currency from M/s NTN Corporation
Singapore for services rendered in India but did not pay service tax.
The appellant has contended that the service was rendered to a company located outside India and the payment for that was also received in
convertible foreign exchange and therefore it amounted to export of service and hence there is no liability to service tax.
Ld. Department representative contended that even if the payment was received in foreign exchange, the service was rendered in India, and
therefore impugned service tax was leviable.
We have considered the contentions of both sides. The appellant was providing the service of commission agent to the Singapore-based company
and was being paid by that company in convertible foreign exchange. Thus the service was rendered to a foreign-based company and as the payment
was received in convertible foreign exchange, it amounted to export of service and therefore the liability to service tax would not arise. This issue is no
longer res integra, having been settled by judgement of CESTAT in the case of Bayana Builders (P) Ltd. vs. Commissioner of Service Tax, New
Delhi - 2013. Even earlier, the same view was held in the case of Lenovo (India) Private Limited vs. Commissioner of Central Excise - 2009 - TIOL -
911 - CESTAT - Bangalore.
In the light of the foregoing, the impugned order is not sustainable and is set aside. The appeal is allowed.