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

ORDER

Ramesh Nair, Member (J)

1. The issue involved in the present case is that whether the IT Service provided by the appellant to their associate company M/s. 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 M/s. 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.

2. Shri Manan K. Bhatt, Learned Chartered Accountant appearing on behalf of the appellant submits that both the companies' i.e. appellant company and the service recipient company are two different entities as both are separately registered as an independent company in respective countries. The shareholders of both companies are also different even though some of the directors are common, therefore, both are different and distinct person. He further submits that merely because a note was given in the balance sheet of the appellant company that the service recipient's company is an Associates Company of the appellant does not alter the legal status of independent entity of both the companies. He further submits that the appellant and the service recipient does not fall under the category of a person as given in the item (b) of Explanation 3 of Clause (44) of Section 65B of the Finance Act, 1994. He placed reliance on the judgment of Hon'ble High Court in the case of Linde Engineering India Pvt. Ltd. & Ors. Vs. Union of India. He submits that in the aforesaid judgment the entity located in India was a 100% subsidiary of Linde AG Germany but both were different companies whereas the present case is on better footing that the appellant is not 100% subsidiary of M/s.........