Hon'ble Judges/Coram:
Ramesh Nair, Member (J) and Raju

ORDER

Ramesh Nair, Member (J)

1. The brief fact of the case is that the appellant are merchant exporter and engaged in export of textiles goods such as fabrics, scarves, sarees, dress materials etc. to various countries. During the course of scrutiny of Shipping bills, it is revealed that Appellant have shown the commission amount to the tune ranging from 11% to 12% paid to commission agent located outside the India. From the scrutiny of their export invoices it is revealed that they were deducting the said commission amount from the gross value of their export goods to arrive the net value of export. The case of the department is that said commission shown in the shipping bills/export invoices is nothing but commission paid to the commission agent towards export of goods, therefore said commission amount is chargeable to service tax under the head "Business Auxiliary Service" in terms of Section 65(19) of the Finance Act 1994 and is taxable service vide Section 65(105)(zzb) of the Finance Act, 1994 read with Section 66A (19) of the Finance Act, 1994 read with section 66A of the said Act under Reverse Charge Mechanism. Accordingly Show Cause Notice was issued and the adjudicating authority confirmed the demand along with penalty and interest. Therefore, the appellant filed the present appeal.

2. Shri Willingdon Christian, Learned Counsel appearing on behalf of the Appellant submits that Appellant is not liable to pay the Service tax, as they had not received any service in India from any foreign Agent. As per the agreement with the foreign buyers, the Appellant was supposed to reduce the gross sale value by 10% as commission. The appellant have received 10% less from the gross sales price as per the purchase order placed by the foreign buyer. The entire demand of Service tax is based wholly on the amount of commission shown as deducted from the overall value ........