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2024 (1) TMI 826 - AT - Service TaxLevy of service tax - Import / Export of services - Place of provisions of services - Business Auxiliary Service - Commercial Coaching or Training Services - Convention Centre Service - Management, Maintenance or Repair Services - Extended period of limitation - interest - penalty. Business Auxiliary Service - Marketing support services received from foreign service provider - extended period of limitation - HELD THAT - Neither in the show cause notice nor in the impugned order, any specific clause of Section 65(19) was mentioned by the Adjudicating Authority while confirming the demand on the appellant. This issue has been considered by various benches of the Tribunal and it has been consistently held by the Tribunal that the demand cannot sustain without specific mention of the clause under which demand is confirmed on the assessee - demand do not sustain. Commercial Coaching or Training Services - subscription paid to institution located outside India - HELD THAT - It is not in dispute that the services in question are performed outside India as evident from Para 34.6 of the Impugned order whereas in terms of Rule 3(ii) of the Taxation of Services (Provided from outside India and Received in India) Rules, 2006, receipt of such services shall qualify as import only if the services are performed in India. In the present case, we find that the subscription fee paid to institutes i.e. foreign service providers, were for coaching and training performed completely outside India and therefore, no tax is payable under reverse charge mechanism - the demand on this service also set aside. Convention Centre Service - HELD THAT - It is found that the entire demand in respect of Convention Centre Services pertains to the period prior to 18.04.2006 hence no service tax can be demanded for the period prior to 18.04.2006 as Section 66A was introduced only w.e.f. 18.04.2006 - it is also found that as per Rule 3(ii) of the Import Rules, receipt of convention services shall qualify as import only if the services are performed in India and therefore, it cannot be taxed in India. Hence, this demand also set aside. Management, Maintenance or Repair Services - HELD THAT - As per Rule 3(ii) of Taxation of Services (Provided from outside India and received in India) Rules, 2000, the receipt of such services shall qualify as import only if the services are performed in India whereas in the present case, it is not disputed that the services are provided outside India and therefore no service tax can be demanded under this head also and the demand under the head of Management, Maintenance or Repair Services also set aside. Extended period of limitation - interest - penalty - HELD THAT - The department in order to invoke the extended period has to establish fraud, collusion, wilful misstatement or suppression of facts or contravention of any provisions of this Act or Rules with an intent to evade the payment of tax which has not been done by the department in this case and moreover, the entire transaction was revenue neutral as the appellant would have taken the credit of the service tax paid under reverse charge and there was no malafide intention to evade the tax - the entire demand is barred by limitation. Once the demand of tax has been set-aside then there is no question of interest and penalty. The impugned order is not sustainable in law - Appeal allowed.
Issues Involved:
1. Demand of service tax under Business Auxiliary Service (BAS) for marketing support services. 2. Demand of service tax under Commercial Coaching or Training Services. 3. Demand of service tax on Convention Centre Services. 4. Demand of service tax under Management, Maintenance or Repair Service. 5. Invocation of extended period of limitation. Summary: 1. Demand of Service Tax under Business Auxiliary Service (BAS) for Marketing Support Services: The appellant contested the demand of Rs. 41,12,109/- under BAS, arguing that the impugned order lacked specific mention of the clause under Section 65(19) of the Finance Act, 1994, under which the demand was confirmed. The Tribunal noted that the demand cannot sustain without specific mention of the applicable clause, citing several precedents including Joshi Auto Zone Pvt. Ltd. vs. Commissioner of Service Tax, Chandigarh. The Tribunal also referenced Circular No. F.No. 276/8/2008-CX8A dated 26.09.2011, which clarified that service tax under reverse charge on services received from outside India is leviable only w.e.f. 18.04.2006. Consequently, the demand under BAS was set aside. 2. Demand of Service Tax under Commercial Coaching or Training Services: The appellant argued that the services in question were performed outside India, and as per Rule 3(ii) of The Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, such services qualify as import only if performed in India. The Tribunal agreed, referencing the cases of Firmenich Aromatics India Pvt. Ltd. and ABB Ltd., and set aside the demand of Rs. 4,41,455/- under Commercial Coaching or Training Services. 3. Demand of Service Tax on Convention Centre Services: The Tribunal found that the entire demand pertained to the period prior to 18.04.2006, before Section 66A was introduced. Additionally, as per Rule 3(ii) of the Import Rules, receipt of convention services qualifies as import only if performed in India. Therefore, the demand under Convention Centre Services was set aside. 4. Demand of Service Tax under Management, Maintenance or Repair Service: The demand related to software upgradation and maintenance performed outside India. The Tribunal noted that as per Rule 3(ii) of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2000, such services qualify as import only if performed in India. Consequently, the demand under Management, Maintenance or Repair Services was set aside. 5. Invocation of Extended Period of Limitation: The Tribunal held that the department failed to establish fraud, collusion, wilful misstatement, or suppression of facts necessary to invoke the extended period of limitation. Additionally, the entire transaction was revenue neutral as the appellant would have taken credit for the service tax paid under reverse charge. Therefore, the entire demand was barred by limitation, and the associated interest and penalties were also set aside. Conclusion: The impugned order was found unsustainable in law, and the appeal was allowed with consequential relief as per law.
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