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2015 (5) TMI 415 - HC - Service TaxIndian subsidiary providing marketing support services for the products manufactured outside India - AAR held that service is not taxable in India - Held that - No interference is called for with the order of the Authority which is impugned in this writ petition. An order which has been passed on a concession given by the Commissioner cannot be challenged by the Commissioner himself. It is not the case of the writ petitioner (Commissioner) that certain material and the relevant Circulars were placed before the Authority and were not considered. After considering the entire case on merits and deciding in favour of the respondent-Company, the questions raised were answered in favour of the assessee on merits and also on the basis of the concession given by the Commissioner that the case of the respondent- Company was covered by the Circular of the Department dated 24.02.2009. The Commissioner cannot be permitted to now turn around and challenge the said order which was passed by the Authority on the basis of his own statement. - Even on merits, what is being canvassed before this Court in the writ petition is something which was not raised before the Authority - Decided against Revenue.
Issues:
1. Determination of the place of provision of marketing and support services under the Place of Provision of Service Rules 2012. 2. Qualification of marketing and support services as export of taxable services under Rule 6A of the Service Tax Rules, 1994. Issue 1: Determination of the place of provision of marketing and support services under the Place of Provision of Service Rules 2012: The case involved the respondent, an Indian subsidiary of a foreign manufacturer, providing marketing and sales support for floor covering products to Indian customers. The respondent sought an advance ruling on the place of provision of services provided to the foreign manufacturers in the USA and China. The Authority ruled that the place of provision would be the location of the service recipients, i.e., in the USA and China, in accordance with Rule 3 of the Place of Provision of Service Rules 2012. Issue 2: Qualification of marketing and support services as export of taxable services under Rule 6A of the Service Tax Rules, 1994: The Authority also addressed whether the services provided by the respondent to the foreign manufacturers qualified as an export of taxable services under Rule 6A of the Service Tax Rules, 1994. The Authority determined that the services provided by the respondent to the foreign manufacturers would amount to an export of service within the meaning of Rule 6A of the Service Tax Rules, 1994. The Commissioner of Service Tax challenged the Authority's order, arguing that the case fell under an exception in Rule 9(c) of the Place of Provision of Service Rules 2012, and the concession given by the Commissioner was based on incorrect information. However, the Court found no grounds challenging the concession given by the Commissioner. The Court also noted that the definition of "intermediary" had changed post-amendment effective from 01.10.2014, making the Authority's ruling inapplicable after that date. The Court refused to interfere with the Authority's order, stating that the Commissioner could not challenge an order based on their own concession. The Court also highlighted that new grounds cannot be raised in a writ petition, especially if they relate to factual aspects not previously raised. The ruling's binding effect was clarified to be until 30.09.2014, after which the matter of taxation would be left to the lower authorities for determination. In conclusion, the Court dismissed the writ petition without any order as to costs, emphasizing that the effect of the ruling would not apply to the respondent-Company after 01.10.2014, leaving the taxation matter post-amendment to be decided by lower authorities.
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