2011 (9) TMI 762 - AT - Service Tax

Waiver of pre-deposit - whether the Business Exhibition services received by the appellant in South Africa and other middle eastern countries in connection with participation in Trade Fairs organised by those countries and which had been received from service providers of those countries is the services received by the appellant in India and whether the appellant are liable to pay Service tax as service recipient in terms of the provisions of Section 65(19a) read with Section 65(105)(zzo) Section 66A of the Finance Act 1994. - held that - the service of Business Exhibition has not been performed in India but has been performed outside India - stay granted

Summary

Issues involved: Determination of whether Business Exhibition services received by the appellant in South Africa and other middle eastern countries in connection with Trade Fairs organized by those countries are considered "services received in India" under the provisions of the Finance Act, 1994, and the liability of the appellant to pay Service tax as a service recipient.

Analysis:
1. Issue of Service Tax Liability: The primary issue in this case revolves around the interpretation of the provisions of the Finance Act, 1994, specifically Section 65(19a) read with Section 65(105)(zzo) and Section 66A. The appellant argued that since the Business Exhibition services were received from service providers located abroad, they should not be considered as services received in India. On the other hand, the Departmental Representative contended that the services were indeed received in India, making the appellant liable for Service tax on the payments made to the foreign service providers.

2. Interpretation of the Taxation of Services Rules: The Tribunal delved into the application of Rule 3(ii) of the Taxation of Services (Provided from outside India and Received in India) Rules, 2006, which stipulates that services shall be treated as provided from outside India and received in India if they are performed in India. In this case, the Business Exhibition services were performed outside India, leading the Tribunal to conclude that the services received by the appellant cannot be categorized as services provided outside India and received in India.

3. Decision and Rationale: After considering the arguments from both sides and examining the records, the Tribunal found that the Business Exhibition services received by the appellant in South Africa and other middle eastern countries were not performed in India. Consequently, the Tribunal held that the services cannot be treated as provided outside India and received in India, thereby determining that the provisions of Section 66A of the Finance Act, 1994, along with Rule 2(1)(d)(iv) of the Service Tax Rules, do not apply. As a result, the Tribunal waived the requirement of pre-deposit of Service tax, interest, and penalty for the appellant, allowing the appeal and staying the recovery of the aforementioned amounts until the appeal's disposal.

In conclusion, the judgment by the Appellate Tribunal CESTAT, NEW DELHI, clarified the tax liability concerning Business Exhibition services received by the appellant, emphasizing the distinction between services performed in India and those performed outside India in the context of Service tax regulations.