2013 (10) TMI 389 - AT - Service Tax

Survey and Exploration of Mineral Service whether supply of information in the form of data is in the nature of goods or services - reverse charge - The contention of the applicant is that the data which applicant received is off-the-shelf product and hence, it is not a service but are goods. - Held that - Section 65(105) provides the service providing to any person, by any person, in relation of survey and exploration of mineral - The reading of above provisions shows that any activity of geological survey in respect of location or exploration of deposits of mineral, oil or gas was taxable service - In the present case, the service was conducted in India i.e. at various regions of east and west coast of India and the information collected by the foreign service provider was received by the applicants - Therefore, prima facie, it cannot be said that the data/information received by the applicants were goods and not service. - Partial stay granted.

Issues:
1. Whether the demand of service tax on data received for survey and exploration of mineral is sustainable?
2. Whether the data received by the applicant can be considered as goods rather than a service?
3. Whether the applicant is liable to pay service tax as the service provider is outside India?

Analysis:

Issue 1: The main issue in this case revolves around the sustainability of the demand for service tax on the data received for survey and exploration of mineral. The applicant argued that the data received is an off-the-shelf product and not a service, making the demand for service tax unsustainable. However, the Revenue contended that the data/information received by the applicant falls under the service category of 'survey and exploration of mineral' as per the provisions of Section 65 of the Finance Act, 1994. The Tribunal analyzed the relevant provisions and concluded that the service received by the applicant from the foreign service provider is indeed a taxable service under the law. Therefore, the demand for service tax was deemed sustainable.

Issue 2: Another crucial aspect of the case was whether the data received by the applicant can be classified as goods rather than a service. The applicant argued that since the data was purchased outside India and delivered to a service provider outside India, they should not be liable to pay service tax. However, the Revenue argued that the data/information received by the applicant pertained to survey and exploration of mineral conducted in India, making it a taxable service. The Tribunal examined the provisions of Section 65 of the Finance Act, 1994, which define 'survey and exploration of mineral,' and concluded that the data received by the applicant cannot be considered as goods but falls under the category of taxable service. Therefore, the argument that the data should be treated as goods was dismissed.

Issue 3: Lastly, the issue of the applicant's liability to pay service tax due to the service provider being outside India was raised. The Revenue contended that since the survey was conducted in India and the information collected by the foreign service provider was received by the applicant, the service activity was not outside India. The Tribunal agreed with the Revenue's argument and held that the service received by the applicant from the foreign service provider is a taxable service under the Finance Act. As a result, the Tribunal directed the applicant to make a pre-deposit of a specified amount within a given timeframe, while waiving the pre-deposit of the remaining dues during the pendency of the appeal.

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