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TMI Blog2014 (1) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the areas specified in column 2 to the Notification in the CS and EEZ for the purposes as mentioned in column 3 of the Notification. The provisions of the Notification were extended to whole of the CS and EEZ at serial No. 1 in respect of any service provided for all activities pertaining to construction of installations, structures and vessels for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof. At serial No. 2, the provisions of the Finance Act were extended to the installations, structures and vessels within the continental shelf and the exclusive economic zone of India, constructed for the purposes of prospecting or extraction or production of mineral oil and natural gas in respect of any service provided or to be provided by or to such installations, structures and vessels and for supply of any goods connected with the said activity. Appellant had not provided any service regarding which the appellant had paid service tax on reverse charge mechanism in respect of any service provided or to be provided by or to such installations, structures and vessels or for supply of any goods connected with such activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the continental shelf and exclusive economic zone of India are liable to service tax only if such services are provided to duly constructed installations, structures and vessels located therein and not otherwise. Based on the above understanding, the appellant paid service tax under protest in respect of certain services and later claimed refund of the same which stands rejected by the Dy. Commissioner of Central Excise Service Tax, LTU, Mumbai by various orders which have been upheld by the Commissioner (Appeals) by the impugned order dtd. 12.9.2012. 3. The contention of the appellants is that during the relevant period, the pre-construction and for construction services in respect of which refund has been claimed were provided and consumed in such areas of CS EEZ to which the proviso of the Finance Act 1994 had either not been extended, or if extended, were exempted under the IOS Rules 2006. The Lower authorities have failed to take note of the fact that till 01.07.2012, the service Legislation did not apply to the entire CS and EEZ of India, but to only some parts thereof and that it was only with effect from 01.07.2012 that the coverage became wide enough to cover the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table. (v) With effect from 01.07.2012, the Service Tax legislation was further extended to the whole of CS EEZ of India by inserting a statutory definition of India: in Chapter V of the Finance Act, 1994. The said definition of India reads thus: India means; (a) The territory of the Union as referred to in clauses (2) and (3) of article 1 of the Constitution; (b) its territorial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 0f 1976); (c) the seabed and the subsoil underlying the territorial waters; (d) the air space above its territory and territorial waters; and (e) the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof; 4. Insofar as pre-construction services are concerned, the contention of the applicants is that if one compares the scope of Notification No.14/2010 with the definition of India in the Act as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Reverse Charge Mechanism by virtue of the exemption granted under the IOS Rules, 2006. A comparison of the two Notifications issued on the same day i.e. Notification 14/2010-ST dated 27.2.2010 and Notification 16/2010-ST dated 27.2.2010, shows that for the purposes of the IOS Rules, 2006, the levy under the Reverse Charge was extended only to locations specified at Sr. No. (2) of the table to Notification NO.14/2010-ST dated 27.2.2010 and not to the locations specified at Sr. No.1 thereof. By defining India' in the IOS Rules, 2006 in such a manner, the Central Government has exempted from levy under the Reverse Charge Mechanism all for construction services . Thus, during the relevant period, the Reverse Charge levy under the IOS Rules, 2006 applied only to such services as were received and consumed in the territory of India, or on the duly constructed installations, structures and vessels located in the CS EEZ of India. 6. The Revenue relied upon the findings of the lower authority. The contention is that by virtue of Notification 14/2010-ST dated 27.2.2010 all services provided in the CS and EEZ became taxable which relates to the activity of prospecting, extraction or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y service provided or to be provided by or to such installations, structures and vessels and for supply of any goods connected with the said activity. On the same day, vide Notification No. 16/2010-ST dated 27.2.2010, amended the provisions of the Taxation of Service (Provided from outside India and Received in India) Rules, 2006. The relevant Notification is reproduced below:- Notification: 16/2010-ST dated 27.2.2010 Taxation of Service (Provided from outside India and Received in India) Rules, 2006 - First amendment of 2010 In exercise of the powers conferred by sections 93 and 94, read with section 66A of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Taxation of Services (Provided from outside India and Received in India) Rules, 2006 , namely :- 1. (1) These rules may be called the Taxation of Services (Provided from outside India and Received in India) Amendment Rules, 2010. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Taxation of Services (Provided from outside India and Received in India) Rules, 2006, (A) in rule 2, for clause (e), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shelf of India and the exclusive economic zone of India were taxable under the reverse charge mechanism. 10. We find that in the impugned order, the Commissioner (Appeals) rejected the contentions of the appellants on the ground that by virtue of Notification 14/2010-ST dated 27.2.2010, all services provided in the CS and EEZ becomes taxable as long as they are related to any activity prospecting, extraction or production of mineral oil and natural gas hence the pre-construction services are liable to service tax on reverse charge mechanism. The Commissioner (Appeals) further held that in respect of construction service, Notification 16/2010-ST dated 27.2.2010 is to be construed in the light of the fact that it was issued only to bring about consequential change to the Taxation of Services (Provided from outside India and Received in India) Rules, 2006 pursuant to the extension of the provisions of the Finance Act to whole of the CS and EEZ vide Notification 14/2010-ST. 11. We find that in the provisions of Notification 14/2010-ST, as reproduced above, the provisions of the Finance Act are extended in respect of the areas specified in column 2 to the Notification in the CS and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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