2018 (8) TMI 33 - AT - Service Tax

Applicability of Service Tax - technical testing and analysis service - the service received by the respondents on or after 18.04.2006 - Reverse charge mechanism - whether any service received by the respondents under the heading technical testing and analysis was received in India wholly or partly after 18.04.2006? - Held that - The learned counsel for the appellants has produced invoice in their defence. However, that invoice is dated 16.02.2006 which is prior to 18.04.2006; the other records like invoices are not available to verify at this end. It is logical that the case should go back to the original Adjudicating Authority for the limited purpose of verifying the services received by them, for the period from 18.04.2006 to December 2006, under the category of technical testing and analysis , consulting engineer service and business auxiliary service - appeal allowed by way of remand.

Summary

Issues:
Applicability of Service Tax on technical testing and analysis service received by the respondent after 18.04.2006.

Analysis:
The case involved the receipt of consulting engineer service, technical testing and analysis service, and business auxiliary service by M/s. ABB Ltd. from foreign companies without an office in India. The Additional Commissioner, LTU confirmed a Service Tax demand of ?44,61,853, which was challenged by M/s. ABB Ltd. before the Commissioner (A). The Commissioner (A) set aside the demand for technical testing and analysis service provided from abroad but upheld the demand for consulting engineer service and business auxiliary service from outside India after 18.04.2006. The Department filed an appeal against this decision.

The Departmental Representative argued that technical testing and analysis service should also be taxable from 18.04.2006, as per Rule 3 of Taxation of Services Rules 2006, which states that if a taxable service is partly performed in India, it shall be treated as performed in India. The counsel for the respondents contended that technical testing and analysis service was performed outside India, evidenced by invoices, and thus not liable to Service Tax under Section 66A of the Finance Act.

Upon hearing both sides, the Tribunal found that the dispute was narrowed down to the applicability of Service Tax on technical testing and analysis service received after 18.04.2006. The Tribunal noted that the invoice provided by the respondents was dated before 18.04.2006, and other records were not available for verification. Therefore, the case was remanded back to the original Adjudicating Authority to verify the services received by the respondents between 18.04.2006 and December 2006 under various categories. The respondents were directed to submit all available records, and the Adjudicating Authority was tasked to examine any duty liability arising on the appellants during that period.

In conclusion, the appeal was allowed by way of remand for the limited purpose of determining any duty liability for the period from 18.04.2006 to December 2006.