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ST – Services provided to clients in relation to procurement of goods or services which are inputs for clients, who are manufacturers – 25/2004-ST available: CESTAT

2019-TIOL-2047-CESTAT-BANG

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH, BANGALORE
COURT NO. I

Appeal No. ST/332/2009-DB

Arising out of Order-in-Appeal No. 34/2009, Dated: 13.01.2009
Passed by Commissioner Of Central Excise (Appeals), Mangalore

Date of Hearing: 13.05.2019
Date of Decision: 13.05.2019

M/s WOLFRA TECH PVT LTD
B-7, HEBBAL INDUSTRIAL ESTATE
MYSORE-570016, KARNATAKA

Vs

COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX
MYSORE S1-S2, VINAYA MARGA, SIDDHARTHA NAGAR
MYSORE – 570011, KARNATAKA

Appellant Rep by: Mr Loknath, Adv.
Respondent Rep by: Dr J Harish, Jt. Commissioner AR

CORAM: S S Garg, Member (J)
P Anjani Kumar, Member (T)

ST – The assessee-company is registered for providing BAS – It received certain commission and further paid commission to agents located abroad – During the relevant period, an SCN was issued to the assessee, proposing duty demand with interest & penalty – On adjudication, such demands were confirmed – On appeal, the Commr.(A) remanded the matter to the original authority while permitting the assessee to utilize Cenvat credit – Hence the present appeal by the assessee against such an order.

Held: The assessee provided services to its clients in relation to procurement of goods or services which are inputs for the clients, who are manufacturers – Hence the exemption under Notfn No 25/2004 is applicable to it – Hence the O-i-A is unsustainable & merits being quashed: CESTAT

Assessee’s appeal allowed

Case laws cited:

CCE vs. SMT K. C. Leelamma, Smart Stocks, Kelath Associates, Equity Investments: 2018 (5) TMI 1463 – CESTAT Bangalore…Para 2

M/s. Aryavrat Housing Constructions (P) Ltd. & Ors. Vs. CCE: 2018 (3) TMI 628 – CESTAT New Delhi…Para 2

FINAL ORDER NO. 20421/2019

Per: P Anjani Kumar:

M/s. Wolfra Tech Pvt. Ltd. are registered for payment of service tax under the category of ‘Business Auxiliary Services’. They have received certain commissions and paid commission to agents outside India. A show-cause notice dated 28.3.2007 was issued to the appellants seeking recovery of service tax amounting to Rs.1,31,752/- along with penalty and interest. The Asst. Commissioner of Central Excise, adjudicated the case vide Order- in-Original No.72/2007 dated 27.11.2007 confirmed the demand. On an appeal by the appellants, Commissioner (A) vide order No.34/2009 dated 13.01.2009 has remanded back the case to the original authority while permitting the appellants to utilize CENVAT credit. The present appeal is against such order.

2. The learned counsel for the appellant submitted that though they have given their submissions before the Asst. Commissioner as well as Commissioner (A) on the applicability of Notification No.25/2004 dated 10.09.2004-ST and No.6/2005-ST dated 1.3.2005. Both the lower authorities have discussed only the applicability of Notification No.6/2005-ST dated 1.3.2005 which exempts services under threshold limit of Rs.4,00,000/- and have come to the conclusion that the exemption is applicable only from the period 1.4.2005 and service tax of Rs.18,125/- is payable for the year 2004-2005. Their submissions in respect of 2004-2005 were not considered. They are not liable to pay service tax in terms of Notification No.25/2004-ST wherein d(i) services provided to a client by commercial concern in relation to the following ‘Business Auxiliary Services’, namely, (i) Procurement of goods or services which are inputs for the clients. He relied upon the decisions rendered in the case of CCE vs. SMT K. C. Leelamma, Smart Stocks, Kelath Associates, Equity Investments: 2018 (5) TMI 1463 – CESTAT Bangalore and M/s. Aryavrat Housing Constructions (P) Ltd. & Ors. Vs. CCE: 2018 (3) TMI 628 – CESTAT New Delhi.

3. The learned AR for the department has reiterated the findings of the OIO and OIA.

4. Heard both sides and perused the records of the case. On going through the records of the case, we find that the appellants have rendered services to their clients in relation to procurement of goods or services which are inputs for the clients. Their clients are manufacturers. Therefore, we find that the exemption contained in Notification No.25/2004 is applicable to them. We find that, in the result, the impugned order is not sustainable. Therefore, the appeal is allowed with consequential relief, if any, to the appellants.

(Operative portion of the Order was pronounced in Open Court on 13.05.2019)

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