DSS IMAGE TECH PVT LTD vs COMMISSIONER OF CGST-DELHI EAST

CCUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
NEW DELHI

PRINCIPAL BENCH- COURT NO. I
SERVICE TAX APPEAL No. 51841 of 2025

(Arising out of Order-in-Original No. 02-05/COMMR/DELHIEAST/PK/2025-26 dated
28.08.2025 passed by the Commissioner Central Tax, New Delhi)
DSS IMAGE TECH PVT LTD .…Appellant
A-5 Mohan Cooperative Indl. Estate,
Mathura Road, New Delhi - 110044

Versus

Commissioner of CGST, Delhi East .…Respondent
CR Building, I.P. Estate,
New Delhi - 110002

A PPEARANCE :
Mr. R. Krishnan, advocate for the appellant

Mr. Mahboob ur Rahman, authorised representative of the department

CORAM :
HON’BLE DR. RACHNA GUPTA, OFFICIATING PRESIDENT
HON’BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)

Date of Hearing : 28.09.2026
Date of Decision : 29.10.2026


FINAL ORDER NO. 51640/2026

DR. RACHNA GUPTA:

1
M/s DSS Image Tech Pvt. Ltd. are registrered with the Service
Tax Department for providing Management, Maintenance or Repair
2 3
Services , Business Auxiliary Services and Erection, Commissioning
4
or Installation Service . During the audit of the appellant’s records for
the period 2006-07 to 2010-11. The department observed that the
appellant was engaged in promoting and marketing the equipments
of a foreign client in India. The department alleged that the activities

1. appellant
2. MMR
3. BAS
4. ECIS

2
ST/51841/2025

are appropriately classifiable as BAS taxable under section
65(105)(zzb) of the Finance Act, 1994. But the service tax was not
paid on the commission received for providing the said services as
was apparent from the service tax returns. The appellant had claimed
the activity to fall under the category of export of services and thus
exempted. On the basis of objection and observations a show cause
notice was served upon the appellants bearing no. 134/2011/660
dated 11.04.2012 proposing the service tax amounting to Rs.
3,09,74,273/- towards service tax on BAS and commission income on
import of goods claimed as export of service. However, Rule 6A of
Service Tax Rules, 1994 got inserted with effect from 01.07.2012
vide Notification No. 36/2012 dated 20.06.2012, according to which
the services provided or agreed to be provided shall be treated as
export of service only when the conditions laid down in the said Rule
are fulfilled. Rule 3(2) of Export of Service Rules, 2005 is also denied
applicable in the present case. However, after coming into effect of
Rule 6A of Service Tax Rules that the place of provision of Service
Rules, 2012 also came into effect on 01.07.2012 and the Export of
Service Rules, 2005 got rescinded.
2. The department alleged that the services provided by the
appellant are being consumed in the taxable territory, hence
appellant was liable to pay service tax. In absence of the payment of
the tax for rendering same services another show cause notice
bearing no. 46/2012/2062-65 dated 22.10.2014 invoking the
extended period of limitation was served upon the appellant
proposing the demand of service tax of Rs. 98,18,596/- for the period
from July 2012 to March 2013 to be paid along with the interest and

3
ST/51841/2025

the appropriate penalties. The original adjudicating authority vide
Order-in-Original no. 02-05/2025-26 dated 28.08.2025 has passed
an order with respect to four show cause notices including the first
one dated 11.04.2012 and the present one dated 22.10.2014 along
with the other show cause notices dated 23.04.2015 and 12.05.2016
all having identical issue adjudicating those against the appellant.
Being aggrieved of the said order that the appellant is before this
Tribunal.
3. We have heard Mr. R. Krishnan, learned counsel for the
appellant and Mr. Mahboob ur Rahman, learned authorised
representative for the department.
4. Learned counsel for the appellant has mentioned that the
appellant deals in the medical equipments and also acts as the
distributor of such equipments of various foreign
companies/suppliers. In addition, the appellant acts as commission
agent for the said foreign suppliers for the direct sales made by them
to the customers in India. As the part of the commission agent
business, the appellant procures orders or enquiries from the
customers in India for the goods sold by the foreign suppliers and
passes on such orders/enquiries to the foreign suppliers. The foreign
supplier, thereafter, directly used to export the goods to the parties
in India, the appellant will just be getting commission paid in foreign
exchange by the foreign party for the said procurement of customers.
It is submitted that there is no tri-partite agreement at all and the
appellant has no privity of contract with the Indian parties. Despite
that, four show cause notices including the one in question have been

4
ST/51841/2025

issued by the department demanding service tax on the commission
income earned in foreign exchange.
5. Learned counsel has denied the activity to be the export of
service, alleging that the receipt of commission from abroad do not
satisfy the condition laid in Rule 6A(d) of Service Tax Rules. It is
submitted that the said condition which requires the place of
provision of service to be outside India has fully been met with in the
appellant’s case as the place of provision vis-à-vis appellant’s service
is place of its foreign client. The appellant does not even fall in the
definition of ‘intermediary’ as given in rule 2(f) of Place of Provision
Rules, as the appellant did not arrange or facilitate the provision of
service. It was only after 01.10.2014 that the definition of
‘intermediary’ was amended to include ‘goods’ also. Thereafter the
appellant started paying tax on such commission income.
6. Learned counsel also submitted that the show cause notice for
the period 2006 to 2009-10, the demand therein has already been
dropped by the departmental authority only. Finally it is submitted
that the show cause notice is even barred by the period of limitation,
as the appellant was regularly filing the ST-3 returns. The tax was
not paid under the bonafide belief that the activity is exempted
(export of service). While relying upon following decisions learned
counsel has prayed for the order under challenge to be set aside and
the appeal be allowed.
(i) Medway Educational Consultant Pvt. Ltd. vs. Commissioner,
5
CGST Commissionerate, Delhi West

5. (2024) 24 Centax 166 (Tri. Del)

5
ST/51841/2025

(ii) Commissioner of Central Goods and Service Tax and Centrl
6
Excise vs. Grant Thornton Advisory Pvt. Ltd
7. While rebutting these submissions, learned departmental
representative has submitted that the services in question were
actually provided by the appellant in India, the services being
consumed in India. The findings in paras 115-119 of the impugned
order have been reiterated. Impressing upon no infirmity therein, the
appeal is prayed to be dismissed.
8. Having heard both the parties and perusing the entire record,
we observe it to be an undisputed fact that the appellant is providing
support to the foreign supplier for procurement of order in India and
promotion of goods dealt by the foreign suppliers, the appellant also
assist them for liaisoning, preparing documents, obtaining tenders
and handling complaints against receiving commission, in foreign
exchange, from the said foreing suppliers. Despite the said
undisputed facts, violation of rule 6(A) of Service Tax Rules, 2012 has
been alleged. We have perused the said rule which reads as follows:
“ Rule 6A - Export of Services (1) The provision of
any service provided or agreed to be provided
shall be treated as part of service when,-
(a) the provider of service is located in the
taxable territory,
(b) the recipient of service is located outside
India,
(c) the service is not a service specified in the
section 66D of the Act,
(d) the place of provision of the service is
outside India,

6. (2025) 26 Centax 143 (Tri. Del)

6
ST/51841/2025

(e) the payment for such service has been
received by the provider of service in convertible
foreign exchange, and
(f) the provider of service and recipient of
service are not merely establishments of a distinct
person in accordance with item (b) of Explanation
2 of clause (44) of section 65Bof the Act.”
The only condition alleged to be violated is the one under sub-clause
(d) above.
9. To adjudicate further we have perused the Place of Provision
Rules. Rule 3 thereof provided that the place of provision of service
shall be the location of the recipient of the service. Service recipient
is the person on whose instructions /orders the service is provided,
who is obliged to make the payment from the same and whose need
is satisfied by the provision of the service. Hon’ble Delhi High Court in
Verizon Communication India Pvt Ltd vs Assistant
7
Commissioner, Service Tax, Delhi has affirmed the said meaning
of the service recipient. The Larger Bench of this Tribunal in the case
8
of Paul Merchants Ltd. vs. C.C.E. Chandigarh has held that the
person who requested for service is liable to make the payment for
the same and whose need is satisfied by the provision of service has
to be treated as recipient of service and it is not the person or
persons affected by the performance of service. Thus when the
person on whose instruction the services in question had been
provided by the agents/sub-agents in India, who is liable to make the
payment for these services and who used the services for his
business is located abroad, the destination of service in question has
to be treated abroad. The destination has to be decided on the basis

7. 2018 (8) GSTL 32
8. 2012 (12) TMI 424 CESTAT Delhi

7
ST/51841/2025

of place of consumption not the place of performance. The situation
was further elaborated by this Tribunal in the case of Study
9
Overseas Global Pvt. Ltd. vs. Commissioner of Service Tax
wherein it was held as follows:
“mere fact that the appellant has been promoting
and marketing foreign universities within India
and then getting prospective students enrolled for
various courses in those universities does not
mean that services to foreign universities were
consumed within India. There is no dispute that
service recipients are foreign universities and they
are located outside India and payment for such
services has been received in foreign currency.”
10. It becomes clear from the above discussion that when a service
is rendered to a third party at the behest of the service recipient, the
third party is not the consumer of the service vis-à-vis the service
provider.
11. Reverting to the facts of the present case, undisputedly, as
already observed above, the foreign clients entered into an
agreement with the appellant requiring appellant to procure orders
for foreigner’s products to be sold in India. From the above discussion
about the service recipient this fact is sufficient to hold that in the set
of circumstances, the foreign client was the service recipient and the
appellant is the service provider. The amount quid pro quo for the
said arrangement, that is the consideration is the commission
received by the appellant in foreign exchange. There is nothing on
record brought by the department to show that after procuring orders
from Indian customers and sending the information to its foreign
client, the appellant had any other role to play vis-à-vis the Indian

9. 2017 (3) GSTL 443

8
ST/51841/2025

customers. There is no evidence to prove that the Indian customers
also qualify to be called as the service recipients of the appellant. In
absence thereof, we hold that violation of condition under sub-clause
(d) of rule 6(A) of Service Tax Rules is wrongly been alleged against
the appellant. The arrangement in question actually amounts to
export of service being provided by the appellant to its foreign clients
against the commission received in convertible foreign exchange, the
said activity is not liable to tax. This activity was not taxable during
the period in question. The confirmation of demand of service tax is,
therefore, liable to be set aside.
12. Coming to the plea of invocation of extended period, we
observe that the appellant was regularly filing the service tax returns,
clearly declaring its activity as export of service. Suppression of facts
cannot at all be alleged against the appellant. The appellant has also
submitted that the activity was bonafidely believed as export of
service. It is the settled position of law that mere failure to declare
does not amount to willful suppression. There must be some positive
act from the side of the assessee to find willful suppression.
Therefore, in view of our findings made herein above that there was
no deliberate intention on the part of the Noticee not to disclose the
correct information or to evade payment of duty, it was not open to
the Central Excise Officer to proceed to recover duties in the manner
indicated in proviso to section 11A of the Act as was held in Anand
10
Nishikawas Co. Ltd. vs. CCE Meerut .

7. 2005 (188) ELT 149 (S.C.)

9
ST/51841/2025

13. Finally observing that department has not produced any
evidence for any positive act of the appellant of suppressing
information from the department that too with an intent to evade
payment of service tax, we hold that the extended period is wrongly
been invoked by the department. The demand gets hit by the period
of limitation. In totality of the entire above discussion, we hereby set
aside the impugned order. Consequent thereto, the appeal stands
allowed.
(Order pronounced in court on 29.10.2026)


(DR. RACHNA GUPTA)
OFFICIATING PRESIDENT




(P.V. SUBBA RAO)
MEMBER (TECHNICAL)

Apoorva