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2018 (2) TMI 1887 - AT - Service TaxLiability of service tax - Consulting Engineering Service - part service provided outside India - HELD THAT - Major part of the service was provided outside India and since there is no provision for making proportionate recovery on the basis of number of days in India. So, no Service Tax is liable to be paid. Appeal dismissed - decided against Revenue.
Issues:
- Appeal against Order-in-Appeal No. 156/2007 regarding Service Tax on consulting engineering services provided by a Netherland based firm to an Indian company. Analysis: The Department filed an appeal against Order-in-Appeal No. 156/2007, dated 23-3-2007, concerning the demand for Service Tax on consulting engineering services provided by a Netherland based firm to an Indian company. The respondent did not have an office in India and was engaged in providing services to an Indian company. The Karnataka High Court, in response to a writ petition, directed the adjudicating authority to re-examine the issue and consider the portion of the service provided outside India. The original authority confirmed the demand, but the Commissioner (Appeals) dropped it, leading to the Department's appeal. During the hearing, the Department's representative argued that a significant part of the service was rendered outside India, and there was no provision for proportionate recovery based on the number of days the service was provided in India. Consequently, the Department contended that no Service Tax was due in this case. After considering the arguments and examining the records, the Tribunal found that the major portion of the service was indeed provided outside India, and as there was no mechanism for proportionate recovery based on the days in India, the Service Tax liability was not established. Therefore, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the Department's appeal. The judgment was pronounced on 7-2-2018 by Justice Dr. Satish Chandra, President, and Shri V. Padmanabhan, Member (T). The Tribunal found no grounds to interfere with the impugned order, and the appeal was consequently dismissed.
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