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2025 (3) TMI 745 - AT - Service TaxLiability of appellant to pay tax on the amount paid or remitted to the foreign based service provider under the Banking and Financial services on Reverse Charge Mechanism RCM basis - place of provision of services - Mega Exemption Notification No. 25/2012 dated 20th June 2012 - demand of interest and penalties. HELD THAT - The present show cause notice is 4th in line. It has been brought to our notice that the SCN dated 21.01.2013 has been decided vide order in original No. 17/2013 dated 29.03.2014 wherein the Assistant Commissioner had dropped the demand in respect of Business Exhibition Service received from the foreign service providers located outside the taxable territory holding that Notification No. 5/2011 dated 01.06.2011 exempts the taxable services specified in sub clause (zzo) of clause (105) of Section 65 of the said Finance Act when provided by an organizer of Business Exhibition for holding a business exhibition outside India from the whole of the service tax leviable thereon under Section 66 of the said Act. The impugned order has absolutely ignored the said decision. It has been the settled law that once an order has been passed allowing full relief to the assessee then it would not be proper for the department to take a different view on same issue provided there are no factual difference in two situations. The Hon ble Apex Court in Vishnu Traders 1993 (11) TMI 230 - SUPREME COURT has held In the matters of interlocutory orders principle of binding precedents cannot be said to apply. However the need for consistency of approach and uniformity in the exercise of judicial discretion respecting similar causes and the desirability to eliminate occasions for grievances of discriminatory treatment requires that all similar matters should receive similar treatment except when factual differences require a different treatment so that there is assurance of consistency uniformity predictability and certainty of judicial approach. Coming to the submission vis- -vis invalidity of the show cause notice demanding service tax under the omitted provisions we observe that the impugned show cause notice has been issued after the amendment in Finance Act with effect from 01.07.2012. The said amendment as per Notification No. 19/2012 dated 05.06.2012 has made the erstwhile section i.e. Section 66 of Finance Act 1994 as inoperative with effect from 01.07.2012 and Section 66B is incorporated as the new charging section of the service tax. The impugned show cause notice has demanded service tax under the erstwhile Section 66 of the Finance Act. The show cause notice is apparently invalid otherwise also as per newly incorporated Section 66B. The service tax with effect from 1.7.2012 is leviable on all services except those specified in the negative list of the services. It is the appellant s case which is not anywhere disputed nor denied that the services were received for conducting Business Exhibitions that too abroad i.e. the exhibitions were conducted outside the taxable territory. Hence had the right provisions would have been invoked at the time of issuance of show cause notice there was no necessity for the issuance. The show cause notice issued under inoperative erstwhile provision is not sustainable. Place of Provision of Services - HELD THAT - The Place of Provisions for holding any exhibition/events shall be the place where the event is held. The department s own Educational Guide dated 20.06.2012 has also clarified that the event held outside taxable territory is not covered under Finance Act 1994. It is an undisputed fact of the present appeal that the Business Exhibition for which the appellant received services from the foreign agencies were held outside the taxable territory. Resultantly the Place of Provision of Services received by the appellant from the foreign service provider shall be outside the territory of India. Accordingly appellant is not liable to pay service tax even under RCM. Mega Exemption Notification No. 25/2012 dated 20th June 2012 - HELD THAT - The adjudicating authorities have miserably ignored the exemption notifications. From Section 66B also there is the tax liability for all services being not covered in the negative list. However section itself clarifies any service shall not be liable to tax if same falls under any of the exemption notification. Hence the demand of service tax has wrongly been confirmed. Imposition of penalty and demand of interest - HELD THAT - Since the service tax itself is not payable the question of charging any interest under provision of Section 75 of the Act does not at all arises - it is observed that it has been defence of the appellant since beginning that the appellant has bona fide belief that it is not liable to pay service tax even under reverse charge on the payment made to the foreign service provider. The said bona fide belief is held to be a reasonable cause for not discharging depositing the service tax. Resultantly the appellant is held entitled for the benefit of Section 80 of the Finance Act 1994. Support drawn from the decision of this Tribunal in Mumbai Bench in the case of Commissioner of Service Tax Mumbai Vs. Gama Consultancy Pvt. Ltd. 2006 (8) TMI 32 - CESTAT MUMBAI . Accordingly the penalty is also wrongly imposed upon the appellant. Conclusion - i) The place of provision rules dictate tax liability and that exemptions must be considered. ii) The show cause notice is invalid. iii) The appellant was not liable for service tax under RCM for exhibitions held abroad; exemptions applied. iv) Penalties and interest are unwarranted. Appeal allowed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal in this judgment include:
2. ISSUE-WISE DETAILED ANALYSIS Validity of the Show Cause Notice:
Taxability of Services Received for Business Exhibitions:
Entitlement to Exemption Notifications:
Imposition of Penalties and Interest:
3. SIGNIFICANT HOLDINGS
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