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2023 (10) TMI 227 - AT - Service TaxLevy of service tax - service of Testing, Inspection and Certification Servicesproviding the service for the goods which were to be exported from India to other foreign buyers - Appellants claimed that the services provided by them amounted to export of services and hence they are not liable for Service Tax payment - penalties - HELD THAT - It is seen that in case of SGS INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX 2011 (2) TMI 54 - CESTAT MUMBAI , the Tribunal was dealing with the dispute which arose for the period 2003. In case of BA RESEARCH INDIA LIMITED, M/S. QUINTILES SPECTRAL (I) PVT. LIMITED VERSUS COMMISSIONER OF SERVICE TAX AHMEDABAD 2010 (2) TMI 230 - CESTAT, AHMEDABAD also there is no mention of the amendment carried out with effect from 01/03/2008. This amendment has been brought in, in order to overcome the decisions of the Tribunal and High Court in the cited case law. Therefore, we are in agreement with the Learned AR that after 01/03/2008, the Appellant case does not survive on merits. However, as pointed out by the Learned Counsel, this matter had been under litigation before the Tribunal/High Court for quite some time and the Appellant may be said to have a genuine belief that they are not required to pay the Service Tax. Since the issue is that of interpretation, it is opined that the Appellant should not be fastened with the demand for the extended period. On account of limitation, the confirmed demand for the extended period set aside - The Adjudicating Authority to work out the details of the demand pertaining to the normal period which would be payable by the Appellant along with interest. Penalties - HELD THAT - Considering the factual details and the interpretational difficulties, there are no justification in imposing penalties on the Appellant. Accordingly, all the penalties are set aside. Appeal disposed off.
Issues:
The issue in this case involves whether the Testing, Inspection, and Certification Services provided by the Appellant amount to export of services, thereby exempting them from Service Tax payment. Summary: The Appellant provided Testing, Inspection, and Certification Services for goods intended for export from India to foreign buyers between October 2005 and September 2010. They claimed that these services constituted export of services, hence exempt from Service Tax. The Department issued a Show Cause Notice, and after due process, the demands were confirmed. The Appellant appealed to the Tribunal. The Appellant argued that even though the testing service was entirely performed in India, the communication of the test report to overseas importers via internet transmission and courier partially fulfilled the service outside India, making it eligible for export of services treatment. They relied on a case law precedent and highlighted the Proviso to Rule 3(1)(ii) of Export of Service Rules 2005. The Tribunal noted that a similar issue was addressed in a previous case law involving SGS India Pvt. Ltd., where the Tribunal's decision was upheld by the Bombay High Court against the Revenue's appeal. The Department pointed out an amendment to Rule 3(1)(ii) made in 2008, stating that for services falling under Section 65 (105) (zzi), the goods in question must be situated outside India at the time of service provision to qualify as export of services. As the goods were tested in India, they argued that post-2008, the Appellant's case did not meet the export criteria. After reviewing the arguments and documents, the Tribunal found that the Appellant's case did not survive on merits post-2008 due to the amendment. However, considering the prolonged litigation and interpretational complexities, the Tribunal set aside the demand for the period up to February 2008 and for the extended period on account of limitation. The Adjudicating Authority was tasked with calculating the payable amount for the normal period along with interest. Penalties on the Appellant were also waived due to factual details and interpretational difficulties. In conclusion, the Tribunal disposed of the Appeal accordingly, taking into account the legal interpretations and factual circumstances presented during the proceedings.
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