2014 (6) TMI 830 - AT - Service Tax

Business Exhibitions conducted abroad - Technical Inspections were done outside India - Import of services - reverse charge - service tax liability under Section 66A of Finance Act, 1994 - parties located abroad - Held that - payments made by the appellant were in respect of exhibitions conducted abroad. Similarly it is seen that the Technical Inspections were done outside India. - as per the provisions of the Rule 3 (ii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, these two services are considered to be imported into India when the service provider is located abroad and service is performed in India. - Since, these services are performed outside India there is no service tax liability on the services in view of the above provisions - Following decision of Paramount Communication Ltd. Vs. CCE, Jaipur 2011 (9) TMI 762 - CESTAT, NEW DELHI - Intas Pharmaceuticals Ltd. Vs. CST, Ahmedabad 2009 (5) TMI 73 - CESTAT, AHMEDABAD - Decided in favour of assessee.

Summary

Issues:
1. Service tax liability under Section 66A of Finance Act, 1994 for Business Exhibitions conducted abroad.
2. Service tax liability under Section 66A of Finance Act, 1994 for Technical Inspection and Certification Service done abroad.

Analysis:

Issue 1: Service tax liability for Business Exhibitions conducted abroad
The Tribunal considered whether there was a service tax liability on the appellant as a recipient of service for Business Exhibitions conducted abroad. The Tribunal noted that payments were made by the appellant to parties located abroad for these exhibitions. Referring to Rule 3 (ii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, it was established that when services are performed outside India by a service provider located abroad, there is no service tax liability. The Tribunal supported this interpretation by citing relevant case law, including Paramount Communication Ltd. Vs. CCE, Jaipur 2012 (25) STR 76 (Tri. - Del.) and Intas Pharmaceuticals Ltd. Vs. CST, Ahmedabad 2009 (16) STR 748 (Tri. - Ahmd.). The Commissioner (Appeals) had also previously allowed the appellant's contention for a subsequent period, leading to the appeal being allowed and the impugned order set aside.

Issue 2: Service tax liability for Technical Inspection and Certification Service done abroad
The second issue involved determining the service tax liability on the appellant for Technical Inspection and Certification Service conducted abroad. The Tribunal observed that the technical inspections were carried out outside India, as indicated in the adjudication order. Following the same reasoning as in the first issue, the Tribunal applied Rule 3 of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, to conclude that since the services were performed outside India by a service provider located abroad, there was no service tax liability. Relying on the clear provisions of the rule and previous Tribunal decisions, the appeal was allowed, and the impugned order was set aside, leading to the disposal of the stay petition accordingly.

This comprehensive analysis of the judgment highlights the key issues, legal interpretations, relevant rules, case law references, and the ultimate decision reached by the Tribunal, providing a detailed understanding of the legal reasoning and outcome of the case.