CESTAT, Chennai Bench
Arafaath Travels (P.) Ltd. Vs. Commissioner of Service Tax, Chennai
Section 65(19)
Sulekha Beevi C.S., Judicial Member And Madhu Mohan Damodhar, Technical Member
Final Order Nos. A/41400-41407 Of 2017
Appeal Nos. ST/214 OF 2007 AND OTHERS
August 4, 2017
ORDER
1. All these appeals since relating to identical dispute on taxability of overriding commission and incentives received by the appellant, they are taken up for common disposal.
2. The Appellant is a General Sales Agent (GSA) for Saudi Arabian Airline Limited (Saudia) for the territories of Tamil Nadu, Andhra Pradesh, Karnataka and Kerala and registered under the category of Air Travel Agent Service. In terms of the agreement dated 01.05.1984 made between the Appellant and Saudia, the Appellant is entitled to receive overriding commission (ORC) at a fixed percentage on the quantum of revenue on account of general sales agency service. As per the agreement the Appellant had received 3% on passenger ticket sales and 2.5% on cargo sales transportation overseas as over-riding commission. Department issued Show Cause Notices proposing imposition of service tax on the overriding commission and the incentives received from Saudia on the ground that the receipts received as overriding commission do not fall under Export of Services and incentives received forms part of the taxable value under the category of Business Auxiliary Service. These proposals were confirmed/upheld by lower authorities along with interest thereon and also imposition of penalties under various provisions of law. Aggrieved, the appellants have filed these appeals before this forum.
3. On 22.07.2017, when the matter came up for hearing, on behalf of appellant, Ld. Consultant Shri R. Viswanathan submitted a table of the issues involved in the appeals filed by them, which is extracted below for ready reference:
| Appeal No. | Year/Period | Issue | Notn. applicable Export Rules |
| ST/214/2007 | 1.7.2003 to 30.6.2006 1.7.2003 to 15.3.2005 | Denial of Export for ORC | Circular No.56/5/03 dt. 5-4-2003 |
| -do- | 16.3.2005 to 19.4.2006 19.04.2006 to 30.06.2006 | Denial of Export for ORC | Notn. No.9/2005 Notn. No.13/2006 |
| ST/122/2008 | 1.7.2006 to 31.3.2007 | Denial of Export for ORC | Notn. No.13/2006 |
| ST/354/2010 | 01.04.2007 to 31.03.2008 | Denial of Export for ORCÂ ORC on Cargo Sales was also denied as export |
Notn. 2/07 dt. 1-3- 2007Notn.30/07 dt. 22-5- 2007 |
| ST/359/2010 | 1.4.2008 to 31.3.2009 | Denial of Export for ORCÂ ORC on Cargo Sales was also denied as export |
Notn. 2/07 dt 1.3.2007 Notn. 30/07 dt 22.5.2007 |
| ST/40760/2013 | 1.4.2010 to 31.3.2011 | Denial of Export for ORCÂ ORC on Cargo Sales was also denied as export |
Notn. 6/10 dt27.2.2010 |
| ST/40291/2014 | 1.4.2011 to 31.3.2012 | Denial of Export for ORCORC on Cargo Sales was also denied as export | No change |
| ST/40039/2016 | 1.4.2009 to 31.3.2010 | Denial of Export for ORCÂ ORC on Cargo Sales was also denied as export |
Notn. 6/10 dt 27.2.2010 |
| ST/41911/2016 | 1.4.2012 to 30.6.2012 | Denial of Export for ORCÂ ORC on Cargo Sales was also denied as export |
No Change |
4. Ld. Consultant also reiterated the grounds of appeal in all these appeals and also made oral submissions common to all the appeals, which can be summarized as follows:—
(i) That the transaction is an export of service under the provisions of Export of Services Rules, 2005 and all the conditions specified in the Rules for the transaction to qualify as export has been satisfied and therefore there is no liability.
(ii) That services are used outside India since the principal enjoys the growth in air traffic out of India to other destinations in the world. The principal is a foreign company whose turnover in a foreign country gets increased due to the services of the Appellant. That the Appellants have met all the conditions set out in the Export of Services Rules, 2005.
(iii) Business Auxiliary services falling under Section 65(105)(zzb) are considered to be export of services in terms of Rule 3(1)(iii)(c) when such services are provided in relation to business or commerce to a recipient located outside India.
(iv) As a General Sales Agent, the client of the Appellant is the principal namely Saudia, which is a foreign company incorporated under the laws of Saudi Arabia and is located at Jeddah, Saudi Arabia.
(v) Saudi Arabian Airlines is appointing the Appellant as a General Sales Agent only because they are not in a position to come to India and get the work done.
(vi) As a result of the promotion work of the Appellant, the turnover of Saudi Arabian Airlines only goes up and all the sales of tickets are revenues of a foreign airlines company.
(vii) All notices, requests, demands, instructions, communications shall be sent only to Saudi Arabian Airlines, Jeddah, Saudi Arabia. This clause shows that all communications to the Airline has to be sent only to Saudi Arabia.
(viii) The Agreement itself has been executed in Saudi Arabia. The contract has also been executed outside India and the service receiver is Saudi Arabian Airlines located outside India.
(ix) The very fact that the Overriding Commission (ORC) is being calculated on net flown revenue shows that only when the business is achieved and the turnover in Saudi Arabia is calculated, therefore the Appellant qualifies for ORC.
(x) The Appellant provided services in relation to business or commerce to Saudi Arabian Airlines, which is a recipient located outside India.
(xi) The proviso to Rule 3(1) clearly states that in case the foreign recipient has an office in India, the order has to come from an office located outside India. In the instant case, the agreement appointing the Appellant as General Sales Agent has been executed outside India. Thus all conditions of Rule 3(1) of the Export of Services Rules are satisfied.
(xii) The conditions of Rule 3(2) which was introduced from 01.03.07 between are fully satisfied since the GSA services are ‘provided’ from India and the services are ‘used’ outside India by Saudia.
(xiii) The services are used outside India since the principal enjoys the growth in air traffic from out of India to other destinations in the world and the principal is a foreign company whose turnover in a foreign country gets increased due to the services rendered by the Appellant. The observations in the OIO that the appellant has admitted that they have been appointed as GSA of Saudi Arabian Airlines is not in a position to come to India and get the work done and therefore the services provided by the Appellant are not used outside India is not tenable.
(xiv) Board vide Circular No.111 /05/2009 dated 24.02.2009, has clarified that the taxable services which falls under Rule 3(1)(iii) of the Export of Services Rules, which are not linked to an identifiable immovable property or location of performance such as Banking and other Financial Services, Business Auxiliary Servicesshall be treated as export on satisfying the condition.
5. The appellant relied on the following case laws:
(i) JB Boda & Co. (P.) Ltd. v. CBDT [1996] 89 Taxman 311/[1997] 223 ITR 271 (SC) wherein It has been held that the receipts even though in Indian Rupees should be considered as receipts in convertible foreign exchange by virtue of the Supreme Court decision in the case of
(ii) PSA Sical Terminals Ltd. v. CCE 2004 (165) ELT 109 (Tri. – Chennai)wherein it has been held that payment receivable in dollar but paid in rupees after conversion as per exchange rate, from amount remittable to overseas principal thereby reducing outgo of foreign exchange are deemed to be earned in foreign exchange.
(iii) National Engg. Industries Ltd. v. CCE 2009 taxmann.com 711 (New Delhi – CESTAT) wherein it is held that Commission received by the appellant from General Motors through Indian Railways in Indian rupees in lieu of foreign exchange as less foreign exchange is not in violation of Export of Service Rules.
6. On the other hand, on behalf of the department Shri B. Balamurugan, Ld. A.R supports the impugned orders and also made oral submissions which can be summarized as under:
(i) Service provided by the appellant falls under BAS. The services provided by the GSA to Saudia cannot be considered as export of service under Rule 3(3) of Export of Service Rules, 2005, in as much as, the appellant has provided the service within a limited territory, which is within India and further action in and outside India are taken care of by Saudia. Therefore, they have not satisfied the main condition, i.e., the services so ordered are delivered outside India and used in business outside India.
(ii) The agreement clearly demarcates the jurisdiction (Tamil Nadu, Andhra Pradesh, Karnataka and Kerala) beyond which the appellant do not have any role to play on behalf of Saudia.
(iii) The appellant’s responsibility ceases after issue of Ticket/Airway bills on all further activities on any claims, demand, cost which are undertaken by Saudia.
(iv) The appellant has to provide one office at Chennai and Cochin to Saudia and should also provide administrative service to Saudia in India in its relation with Government Agency and General Public within its territory. It is further noted that as per the agreement the appellant should provide an office to Saudia so as to be identifiable as Saudi Airlines.
(v) Appellant has not fulfilled the substantive condition of Export Service Rules, 2005 inasmuch as the ORC was deducted by the appellants in INRs based on the credit notes issued by the local office of Saudia in Chennai. There is no receipt of ORC in foreign Currency, which is the condition stipulated under Export of Service Rules, 2005.
(vi) Adjudicating Authority has correctly distinguished the decision of JB Boda and PSA Sical (Para 14.7 and 14.8 of Order in Original No.102/2007 dated 28.06.2007 ). The case law in Indian Engineering case pertains to conservation of foreign exchange as against the receipt of foreign exchange into the country which is the core issue of export of services as per the condition stipulated.
(vii) The facts in the present case are identical to the facts of the decision of this Hon’ble Tribunal, Chennai in the case of ETA Travel Agency (P.) Ltd. v. CCE [2007] 9 STT 370 (Chennai). The applicability of the above decision is elaborately discussed at para 14.11 of Order in Original No.102/2007. The above decision has been followed by the Hon’ble Tribunal, Chennai, in the case of M/s.Translanka Air Travel (P.) Ltd. v. CST, [2007] 10 STT 19 (Chennai). In all the cases, the facts are identical to the facts in the present case.
7. Heard both sides and have gone through the facts.
7.1 Admittedly, appellants are a General Sales Agency (GSA) for Saudia with headquarters at Jeddah, Saudi Arabia and the transactions are covered by an agreement.
7.2 Commercial services to be rendered by the GSA are specified in Article II of the Agreement which we find includes soliciting, promoting and selling passenger air transportation for Saudia and assist in all operations likely to encourage traffic of Saudia’s lines; select IATA sales agents as Saudia representatives and ensure that Saudia carriage documents are issued by these agents; service and supervise these sub- agents and provide administrative service to Saudia.
7.3 Article IV of the captioned agreement ‘Commission to GSA’ contains various commissions applicable to GSA. Para 1 of clause B of the said Article IV states that Saudia will pay GSA Normal and Overriding Commission (ORC) for air transportation over the service of Saudia sold only in the allowed territory by the GSA or sub-agents on Saudia’s traffic documents/ticket stock. Paras II & III also contains the entitlement of normal commission/overriding commission to GSA. In terms of the above agreement, the assessee admittedly are in receipt of 3% ORC on passenger sales and 2.5% on cargo sales.
7.4 The appellant has prima facie accepted that the overriding commission falls under the category of service BAS and is chargeable to tax accordingly. However, the appellant’s contention is that the service is rendered to Saudia as the part of the above agreement and the same is to be treated as export of services and therefore the appellant has pleaded that they are exempted from payment of service tax. As regards the terms of payment in Indian Rupees which militates against the conditions stipulated under export of service rules, the appellant has contended that initially before the investigation started, the amount payable as ORC was deducted by the appellant from the proceeds and the balance amount only was remitted to Saudia. The credit notes for deduction of ORC was issued by the local office of Saudia in Chennai. After initiation of investigation by the Department, the mode of payment has been changed from rupees to foreign currency.
7.5 The core issue that comes for appellate decision in all these appeals is whether the service rendered by the appellant can indeed be treated as ‘Export of Services’ or otherwise.
7.6 The Export of Services Rules, 2005 came into force on 15.03.2005. These rules have been, so to say, work in progress since they have been amended on twelve occasions till they were finally superseded by Notification No.28/2012-ST dt. 20.06.2012. When introduced, the export of taxable service was elucidated in Rule-3 of the notification as follows:
“Export of taxable service.
3. The export of taxable service shall mean,—
(1) in relation to taxable services specified in sub-clauses (d),(p),(q),(v) and (zzq) of clause (105) of section 65 of the Act, such taxable services as are provided in relation to an immoveable property which is situated outside India;
(2) in relation to taxable services specified in sub-clauses (a),(f),(h),(i),(j),(l),(m),(n),(o),(s), (t),(u),(w),(x),(y),(z),(zb),(zc),(zj),(zn),(zo),(zq),(zr),(zt),(zu),(zv),(zw),(zza),(zzc),(zzd), (zzf),(zzg),(zzh),(zzi),(zzj),(zzl),(zzm),(zzn),(zzo),(zzp),(zzs),(zzt),(zzv),(zzw),(zzx)and (zzy) of clause (105) of section 65 of the Act, such services as are performed outside India:
Provided that if such a taxable service is partly performed outside India, it shall be considered to have been performed outside India;
(3) in relation to taxable services, other than,-
(i) the taxable services specified in sub-clauses (a),(f),(h),(i),(j),(l),(m),(n),(o), (p),(q),(s),(t),(u),(v),(w),(x),(y),(z),(zb),(zc),(zj),(zn),(zo),(zq),(zr),(zt),(zu), (zv),(zw),(zza),(zzc),(zzd),(zzf),(zzg),(zzh),(zzi),(zzj),(zzl),(zzm),(zzn),(zzo), (zzp),(zzs),(zzt),(zzv),(zzw),(zzx) and (zzy); and
(ii) the taxable service specified in sub-clause (d) as are provided in relation to an immoveable property,
of clause (105) of section 65 of the Act,—
(i) such taxable services which are provided and used in or in relation to commerce or industry and the recipient of such services is located outside India:
Provided that if such recipient has any commercial or industrial establishment or any office relating thereto, in India, such taxable services provided shall be treated as export of services only if-
(a) order for provision of such service is made by the recipient of such service from any of his commercial or industrial establishment or any office located outside India;
(b) service so ordered is delivered outside India and used in business outside India; and
(c) payment for such service provided is received by the service provider in convertible foreign exchange;
(ii) such taxable services which are provided and used, other than in or in relation to commerce or industry, if the recipient of the taxable service is located outside India at the time when such services are received.
Explanation.-For the purpose of this rule “India” includes the designated areas in the Continental Shelf and Exclusive Economic Zone of India as declared by the notifications of the Government of India in the Ministry of External Affairs Nos. S.O.429(E), dated the 18th July, 1986 and S.O.643(E), dated the 19th September, 1996.”
7.7 Subsequently, vide Notification No.13/2006-ST , Rule 3 was amended inter alia as under:
(2) The provision of any taxable service shall be treated a export of service when the following conditions are satisfied, namely:—
(a) such service is delivered outside India and used outside India; and
(b) payment for such service provided outside India is received by the service provider in convertible foreign exchange.
Thereafter vide Notification No.2/2007-ST dt. 1.3.2007 , the requirements were further tweaked as follows:
(2) The provision of any taxable service specified in sub-rule (1) shall be treated as export of service when the following conditions are satisfied, namely:-
(a) such service is provided from India and used outside India; and
(b) payment for such service provided outside India is received by the service provider in convertible foreign exchange.
However, vide Notification No.30/2007 dt. 22.05.2007 , w.e.f. 1.6.2007 in sub-rule (2), in clause (b), the words “provided outside India” was omitted. Further amendment was made vide Notification No.6/2010- ST dt. 27.02.2010 where inter alia in sub-rule (2) clause (a) was omitted.
7.8 Business Auxiliary Services being taxable in terms of Section 65 (105) (zzb) were thus governed by the conditionalities in Rule 3(3) of the said Export of Service Rules, 2005. The major requirement of a Business Auxiliary Service to be considered as export of service is that such services are provided and used in or in relation to commerce and industry and the recipient of such services are located outside India. We find that the services provided by appellant are definitely in relation to commerce. Further, it is not disputed that these services were provided on the agreement signed between the appellant and their client Saudi Arabian Airlines Corporation, Jeddah, Saudi Arabia. Thus the first two conditionalities are satisfied. If the recipient of such service has any commercial or industrial establishment or any office relating thereto in India, for the taxable services to be treated as export of services, order for provision of such service is to be made by the recipient from his office located outside India, the service is delivered outside India and used in business outside India and payment for such service is received by service provider in convertible foreign exchange. It is the last conditionality concerning receipt of payment in convertible foreign exchange that is the hub of this controversy in these appeals.
7.9 Subsequent amendments to the Export of Service Rules also retained the requirement that payment for service provided is received by the service provider in convertible foreign exchange.
7.10 There is no dispute that the services of the appellant have been contracted by its office of Saudi Arabian Airlines located in Jeddah, Saudi Arabia. It is also clear that scope of these services to be provided by the appellant included “soliciting, promoting and selling passenger air transportation for Saudia, assistance in all operations likely to encourage traffic on Saudia’s Airlines. Evidently, these activities performed by the appellants are contracted to have beneficial impact on air transportation traffic on Saudi Airlines. Although the appellants have been contracted as Saudia’s GSA for the territory of Tamil Nadu, Andhra Pradesh, Karnataka and Kerala, appellant as a GSA is authorized to make sales over the services of Saudia and any other carrier with whom Saudia has interline traffic agreements. Soliciting and promoting of passenger air transportation is permitted to be done by the appellant on all lines awarded out by Saudia. Similarly, in the General Sales Agreement for Cargo entered into between the Saudi Arabian Airlines Corporation, Jeddah Office and the appellant, like air passenger transportation, the appellant in the GSA Agreement for cargo is similarly required to provide commercial services to Saudia including soliciting, promoting and selling cargo and mailing transportation for Saudia and assisting in all operations to encourage traffic agreement of Saudia’s lines. Evidently, the commercial services provided by the appellant, inter alia, soliciting, promoting and selling passenger air transportation and cargo and mail transportation for Saudia is very much a Business Auxiliary Service, ordered by Saudi Arabian Airlines, Jeddah, to benefit all such service flowing to Saudia’s business.
8. Pursuant to number of disputes that had arisen on the condition ” used outside India “, the CBEC had found it necessary to issue a circular dt. 111/05/2009-ST dt. 24.02.2009 . The CBEC has advised in para-3 of the circular, that the law has to be read harmoniously so as to avoid contradictions within a legislation and accordingly, the meaning of the terms “used outside India” has to be understood in the context of the characteristics of a particular category of service as mentioned in sub-rule (1) of Rule 3 of the Export of Service Rules, 2005. The circular further gives an example of category of three services [Rule 3 (1) (iii)] where it is possible that services may take place even when all the relevant activities take place in India so long as the benefits of the services accrue outside India. Board further clarifies that for Rule 3 (1) (iii), the relevant factor is the location of the service receiver and not the place of performance. Viewed in this light, there can be no dispute that although the activities of the appellant take place in India, what is accruing outside India is the benefit in terms of business of the foreign company, namely, Saudi Arabian Airlines, Jeddah, Saudi Arabia. Therefore the service of the appellant will have satisfied this particular requirement in Rule 3 (3) of the Rules.
9. The only issue, now remaining to be analysed is whether retention of the full amount of commission while making remittance to Saudia of all monies due for transportation sold during previous month would fall foul of the requirement in Rule (3) (3) of the Rules that ” payment for such service is received in convertible foreign exchange “.
10. On this contentious issue (whether payment has been received in foreign exchange), Revenue has placed considerable reliance on the ratio of Tribunal decision in ETA Travels Agency (P.) Ltd. (supra). The lower authorities in these appeals have relied upon the said decision. We find that in the ETA Travels case, appellant therein had received commission from the airlines by way of credit notes. The credit notes mentioned the amounts in terms of Indian rupee and such amounts were credited to the appellant’s bank account. The Tribunal held that no part of the overriding commission (ORC) was received by way of inward remittance in convertible foreign exchange. Hence ORC received cannot be considered as receipts of convertible foreign exchange. Ld.A.R for Revenue has pointed out that this decision was followed by the Tribunal in the case of Trans Lanka Air Travel (P.) Ltd. (supra). While this maybe so, however, the appellants have argued that ETA Travels decision has been stayed by the Hon’ble High Court of Madras in C.M.A.No.2359/2007 vide order dt. 26.10.2007 . It has been confirmed by Revenue that the matter has still not been decided by Hon’ble High Court. We also note that the very same High Court of Madras, which is the jurisdictional High Court for this Tribunal, in a recent judgment in the case of Suprasesh General Insurance Services & Brokers (P.) Ltd. v. CST [2015] 62 taxmann.com 364 (Mad.) has addressed the very same controversy. The facts in Suprasesh are that appellant therein did not pay service tax for arranging reinsurance for Indian insurers from foreign reinsurers through foreign brokers on the ground that services were provided to a foreign company located outside India, therefore it amounted to export of service. Department argued that assessee’s services were provided to Indian insurance companies and payment was also received in Indian rupee. Hence it was not an export of service for the purpose of Rule 3 of the Export of Service Rules, 2005. The High Court held that the services were provided/used in relation to commerce and industry, that the service recipient being foreign company was located outside India, it amounted to ‘export of service’ and there was no requirement to receive consideration in foreign exchange. The Hon’ble High Court placing reliance on the decision of the Hon’ble Apex Court in the case of JB Boda & Co. (P.) Ltd. (supra)and binding circular of the RBI dt. 25.04.2003 , inter alia, held in favour of the appellant therein. Similar views have also been expressed in a number of other decisions by the Tribunal, for example in the case of Microsoft Corpn. (I) (P.) Ltd. v. CST [2011] 16 taxmann.com 258/[2012] 34 STT 19 (New Delhi – CESTAT) wherein it was inter alia held that Business Auxiliary Services of promotion of market in India for a foreign principal would amount to export of service and would be covered by the provisions of Export of Service rules and are not liable to service tax. In the case of Blue Star Ltd. v. CCE [2009] 18 STT 34 (Bang. – CESTAT), the facts were that the appellant therein took orders in India for the goods of foreign principals. Once the foreign supplier exports the goods to India and receives payment, a commission is paid to the appellant. The Tribunal held that the services rendered have been exported in terms of Rule 3 (2) of the Export of Service Rules, 2005. In the case of Sun Area Real Estate (P.) Ltd. v. CST [Final Order No. A/1078/2015-WZB/SMB, dated 16-4-2015], the Tribunal relying upon the Apex court judgment in the case of J.B. Boda & Co. (P.) Ltd. (supra) held that when out of the total payment to be made by the insurance broker in India to the foreign insurer, the same was reduced to the extent of his brokerage and remaining amount was remitted to foreign insurer in foreign exchange, such Indian rupees was obtained in lieu of foreign exchange the same will be deemed to be convertible exchange. The Tribunal decision also took note of Foreign Exchange Management Act provision that if payment in Indian rupees is received through banking channel its deemed to be convertible foreign exchange.
11. We are informed that CESTAT Delhi in the case of Bird Travels (P.) Ltd. v. CCE [Final Order No. 52656-52659 of 2016, dated 28-7-2016], inter alia, placing reliance on decision in ETA Travels (supra) has taken a contrary view. However, by the principle of stare decisis this Tribunal is enjoined to follow the law laid down by the jurisdictional High Court of Madras in the case of Suprasesh General Insurance Services cited (supra). We are aware that the Suprasesh judgment has been appealed against by the department and the Hon’ble Apex Court after condoning the delay has issued notice, as reported in2016 (43) STR J22 (SC) , however as no stay of the Suprasesh judgement has been ordered by the Hon’ble Apex Court, we intend to follow the ratio thereof as laid down by the High Court of Madras.
12. No doubt, the proviso in Rule 3 (3) of Export of Service Rules, 2005 does require that the payments are received in convertible foreign exchange. But viewed in the light of decisions discussed supra, and in particular, that of the Hon’ble Apex Court judgement in J.B. Boda & Company (supra) and that of the Hon’ble High Court of Madras in Suprasesh General Insurance Services (supra), even when the said payment to the appellant has been received in Indian rupees, however, there is a saving of foreign exchange since appellant has retained that portion and not sent the same in foreign exchange to the service recipient along with the other sale proceeds. Outflow of foreign exchange has been reduced to the extent of the commission/payment retained by the appellant within India. Such retention will then have to be necessarily treated as saving of foreign exchange and by implication is akin to receipt of monies in convertible foreign exchange. Surely, the department would not have any dispute if the appellant had remitted entire proceeds to Saudia, Jeddah and in turn the commission, determined as a percentage of such proceeds, in convertible foreign exchange is transferred to them from Jeddah. In our view, the procedure of retaining the commission amount and only remitting the remaining portion of the proceeds, during the periods of dispute, would have the same end effect. In any case, we understand that the roundabout procedure insisted upon by the department is being followed by the appellants after this period of dispute. Nonetheless, in view of the foregoing discussions, we are of the considered opinion that even by retaining the amount of overriding commission while remitting the proceeds to their foreign client, without receiving it subsequently from the client in convertible foreign exchange. The conditionalities of Rule 3 (3) of the Export of Service Rules, 2005 as amended and as was applicable during the different periods involved in these appeals will be deemed to have been satisfied by the appellant. Hence the services rendered by them to the foreign recipient will be nothing but export of Business Auxiliary Services which are exempted from liability to service tax.
13. In view thereof the impugned orders in these appeals demanding service tax on the services rendered by the appellant along with interest and imposition of penalties etc. cannot be sustained, and in consequence we set them aside in toto. All these appeals are therefore allowed with consequential relief, if any, as per law.
