Case Law Details
Messrs Aarvee Denims & Exports Ltd Vs C.S.T.-Service Tax (CESTAT Ahmedabad)
In case of sales commission to overseas commission agent under reverse charge mechanism, the extended time proviso is not invokable.
Ahmedabad Bench of CESTAT has ruled in favor of Messrs Aarvee Denims & Exports Ltd, quashing a service tax demand on sales commission paid to overseas commission agents under the Reverse Charge Mechanism (RCM). The tribunal noted that the extended time proviso cannot be invoked in this case as there was no intent to evade service tax.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The brief facts of the matter are that the appellant are engaged in the business of manufacturing and export of garments. The department initiated an inquiry and came to know that the appellant had appointed some agents in foreign countries for promotion, marketing and sale of their goods in foreign countries on payment of brokerage /commission. The department formed a view that the appellant have been receiving service of foreign agents for which they have not discharged the service tax liability as per the provision of the Finance Act, 1994. It has been the contention of the department that as per the provisions of section 66 A of the Finance Act, 1994 read with Section 65 (19) of the Finance Act, 1994 and Section 65 (105) (zzb) of the said act with regard to the Business Auxiliary Service, the appellant should have paid service tax on the services received by him from the persons based outside India.
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