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2016 (1) TMI 439 - AT - Service TaxRefund claim - service tax was paid under reverse change mechanism - Technical Testing and Analysis Service - service was not partly performed in India - period of limitation - Held that - the proviso to Rule 3(1)(ii) of Taxation of Services Rules, 2006 will be applicable in a case the service is partly performed in India. In the present case, there is no dispute that the service was provided outside of India and therefore, they are not covered under the said proviso. - Adjudicating authority directed to allow the refund to the Appellant in accordance with law. - Decided in favor of assessee.
Issues:
Refund claim rejection on merit and limitation. Analysis: The appeal was filed against the rejection of a refund claim of Rs. 65,006. The Adjudicating authority rejected the claim on merit and limitation. The Commissioner (Appeals) upheld the rejection on merit but acknowledged that the original refund claim was filed within the stipulated time. The Appellant paid a foreign service provider for "Technical Testing and Analysis Service" on 03.07.2006, falling under the reverse charge mechanism as per Section 66A of the Finance Act, 1994. The Appellant contended that the tax was not payable under Rule 3(1)(ii) of the Taxation of Services Rules, 2006. The Commissioner (Appeals) noted that the service provider performed the service abroad and denied the benefit of the rules, stating that if the service is partly performed in India, it shall be treated as performed in India as per Section 67 of the Act. However, the Tribunal's decision in another case supported the view that if the service is entirely performed outside India, it is not covered under the proviso of Rule 3(1)(ii). The Tribunal's findings in the referenced case emphasized that if there is no evidence of the service being partly performed in India, Service Tax is not leviable. Therefore, the Appellant was entitled to the refund as the service was provided entirely outside India, and the appeal was allowed. The impugned order was set aside, directing the Adjudicating authority to grant the refund to the Appellant as per the law.
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