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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> Customs, Excise and Service Tax Appellate Tribunal IT services provided by Assessee to associate Company in USA amounts to export of service MANU/CS/0120/2022 - (06 Jun 2022) </td> </tr> <tr> <td align="left" valign="top">Celtic Systems Private Limited Vs. C.C.E. & S.T.</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">The issue involved in the present case is that whether the IT Service provided by the Appellant to their associate company Celtic Cross Holding Inc. USA is amount to export of service in terms of Rule, 6A(1) of Service Tax Rules, 1994 or otherwise. The Adjudicating Authority demanded the Service Tax holding that the supply of service by the appellant to company Celtic Cross Holding Inc. USA does not amount to export on the ground that:- (i) the appellant could not prove that they have received the export proceeds in convertible foreign exchange (ii) the appellant and the service recipient are not establishment of a distinct person in accordance with item (b) of Explanation 3 of Clause (44) of Section 65B of the Finance Act. For the reason that as per department, both the appellant and service recipient are falling under same entity, hence, they are not a distinct person in accordance with Clause (f) of Rule 6A (1) of Service Tax Rules, 1994, the Service does not fall under the category of export. 
 Being aggrieved by the Order-In-Original appellant filed the appeal before the Commissioner (Appeals). From the order of the Commissioner (Appeals) the only issue left is that the appellant have not fulfilled the condition of Clause (f) Rules 6A(1) of Service Tax Rules, 1994. Accordingly, the demand was upheld, therefore, the Appellant filed the present appeal. 
From the facts on the records, it is not disputed that the Appellant company is working under the banner of Celtic System Pvt. Ltd. registered with the registrar of companies in India. Whereas, the Service recipient is working under the banner of Celtic Cross Holding Inc. USA. Both the companies are separately registered in their respective countries. Even the directors of the company though two directors are common but others are different. Even if there is a note in the balance sheet of the appellant company that they are associate of M/s Celtic Cross Holding Inc. USA but in the eyes of law as per the companies act both companies are independent entity. Therefore, Clause (f) of Rules 6A (1) of Service Tax Rules, 1994 stand complied with. 
 This issue has been considered of Hon’ble Gujarat High in the case of Linde Engineering India Pvt. Ltd & Ors, wherein the Hon’ble Gujarat High court even in case where the Indian Company was 100% subsidiary of the foreign company namely Linde AG Germany has held that both are different entity. In the present case the appellant are on better footing as they have constitutionally two different entity one is the appellant and other is M/s Celtic Cross Holding Inc. USA. 
 Therefore, in view of judgment of Gujarat High Court, it is clear that in the present case the Appellant and the service recipient are two distinct person, hence, the service provided by the appellant to Celtic Cross Holding Inc. USA clearly falls under export of service. Therefore, the demand confirmed by the adjudicating authority and upheld by the Commissioner (Appeals) is not correct and legal. The impugned order is set aside. Appeal is allowed.</td> </tr> <tr> <td align="left" valign="top" ></td> </tr> <tr> <td align="left" valign="top" >Tags : Demand, Confirmation, Legality</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>