Case Details: Carrier Airconditioning Refrigeration Ltd. vs. Commissioner of Service Tax, Amritsar (2026) 42 Centax 234 (Tri.-Chan.)
Judiciary and Counsel Details
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- S.S. Garg, Member (J) & P. Anjani Kumar, Member (T)
- Ms Krati Singh, Ms Shreya Khunteta, Ms Gulrukh Sidhu, Advs., for the Appellant.
- S/Shri Siddharth Jaiswal & Nikhil Kumar Singh, Authorised Representatives, for the Respondent.
Facts of the Case
The appellant, a wholly owned subsidiary of a US-based company, facilitated the sale of products manufactured by overseas group entities. The appellant forwarded enquiries received from Indian customers to overseas entities, which independently negotiated, contracted and invoiced the Indian customers. The goods were directly imported by Indian customers from overseas entities. The appellant received commission from overseas entities in convertible foreign exchange. The Department alleged that the appellant had rendered Business Auxiliary Service and had failed to discharge service tax on the commission received. Show cause notices were issued for the period from April 2006 to March 2010, and the adjudicating authority confirmed service tax demand along with interest and penalties. The order was challenged before the CESTAT.
CESTAT Held
The CESTAT held that the relevant factor for determining export of service under the Export of Services Rules, 2005 was the location of the service recipient and not the place of performance of service. It was observed that the appellant had rendered services to overseas group entities located outside India and had received consideration in convertible foreign exchange. The Tribunal further observed that the benefit of the services accrued to the overseas entities and therefore the services were to be regarded as used outside India.
Relying upon the Larger Bench decision in Arcelor Mittal Stainless (I) Pvt. Ltd. and various High Court decisions, the Tribunal held that the commission received by the appellant qualified as export of service and no service tax was payable thereon. Accordingly, the impugned order was set aside and the appeal was allowed with consequential relief.
List of Cases Cited
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- Arcelor Mittal Stainless (I) P. Ltd v. Commissioner — (2023) 11 Centax 269 (Tri.-LB) — Followed [Paras 4.3, 6, 7, 10]
- Baheti Agri Links v. Commissioner — (2025) 34 Centax 207 (Tri. – Del) — Referred [Para 4.3]
- Commissioner v. A.T.E. Enterprises Pvt. Ltd. — 2018 (8) G.S.T.L. 123 (Bom.) — Followed [Paras 4.3, 8, 10]
- Commissioner v. Blue Star Ltd — 2018-TIOL-1976-HC- MUM-ST — Referred [Para 4.3]
- Commissioner v. Life Care Medical Systems — 2018 (18) G.S.T.L. 587 (Bom.) — Followed [Paras 9, 10]
- Commissioner v. Wartsila India Ltd. — 2019 (24) G.S.T.L. 547 (Bom.) — Referred [Para 4.3]
- IBM India Pvt. Ltd. v. Commissioner — 2020 (34) G.S.T.L. 436 (Tri.-Bang) — Referred [Para 4.3]
- Orbit Research Associates Private Limited v. Commissioner — (2025) 31 Centax 451 (Tri.-Del) — Followed [Paras 4.3, 7, 10]
- Reebok India Company v. Commissioner — Final Order Nos. 60287-60288/2023 dated 25-8-2023 by CESTAT, Chandigarh — Referred [Para 4.3]
- Verizon Communication India Pvt. Ltd. v. Assistant Commissioner — 2018 (8) G.S.T.L. 32 (Del.) — Referred [Para 4.3]
List of Departmental Clarification Cited
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- C.B.E. & C Circular No. 111/5/2009-S.T., dated 24-2-2009 [Paras 4.1, 4.2]
List of Notifications Cited
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- Notification No. 6/2010-S.T, dated 27-2-2010 [Para 4.2]
