Order date – 20 April 2023

Parties – Solvay Specialities India Pvt Limited Vs Commissioner of Central Excise & ST, Surat-II

Facts –

• The appellant, SOLVAY SPECIALITIES INDIA PVT LIMITED, contends that the sales promotion and marketing services provided by the appellant in foreign countries amount to export of service as per Export of Service Rules. 
• Regarding the second issue, the appellant has not paid the service tax under reverse charge mechanism but subsequently paid the service tax along with the interest. 
• The appellant had claimed the exemption vide Notification No. 18/2009-ST from 01/10/2009 which is denied by the adjudicating officer on the grounds of procedural lapse. Except the lapse of not mentioning invoice number in the shipping bill, there is no other violation of notification.
• Aggrieved by the order, present appeal is filed.

Issues –

• Whether the exemption can be denied on the grounds of procedural lapse? 

Order –

• The Tribunal has observed that the service provided by the appellant qualify as export of service in terms of Rule 3(1) of Export of Service Rules.
• The commission paid to the foreign based agent towards the service of sales promotion and marketing received by the appellant is liable to service tax under reverse charge mechanism till 30/09/2009 in terms of Section 66A of the Finance Act, 1994.
• The tribunal has observed that the exemption claimed by the appellant from 01/10/2009 can not be denied merely for the small procedural lapse.
• Penalty is set aside as no malafide intention is established.   
• The appeal is allowed.