Commissioner of CGST & Central Excise Vs Global Reach (CESTAT Kolkata)
The Revenue filed two appeals challenging Orders-in-Appeal dated 15.01.2025. In the first appeal, the Department alleged that the respondent had declared service income in its Income Tax Returns for the period from October 2014 to March 2015, FY 2015-16 and FY 2016-17 while showing NIL taxable value in the corresponding ST-3 returns. Based on the differential value, a show cause notice dated 18.12.2020 proposed recovery of service tax of ₹1,76,83,193 along with interest under Sections 73(1) and 75 of the Finance Act, 1994 and penalties under Sections 77 and 78. The adjudicating authority confirmed the demand, interest and penalties through an Order-in-Original dated 16.02.2023.
In the second appeal, the Department conducted an investigation based on CBDT data for the period FY 2015-16 to FY 2017-18 (up to June 2017). The respondent explained that it earned commission from foreign educational institutions for identifying suitable students, conducting admission tests and assisting admissions, and claimed exemption from service tax. After examining the records, the Department alleged non-payment of service tax of ₹1,67,88,326 and issued a show cause notice dated 29.12.2020 proposing recovery of tax, interest, penalties and late fees. The adjudicating authority confirmed the demand, imposed equivalent penalty under Section 78(1), penalty under Section 77 and directed recovery of late fees. It held that the services were not export of services and constituted intermediary services under Rules 2(f) and 9(c) of the Place of Provision of Service Rules, 2012.
