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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 ..... sumed in the off-shore locations beyond 12 nautical miles, i.e in the Continental Shelf and Exclusive Economic Zone of India were not taxable prior to 27/02/2010. Vide Notification NO. 14/2010-STdtd./27/02/2010, the provisions of Chapter V of the Finance Act 1994 were extended to the whole of Continental Shelf and Exclusive Economic Zone of India for certain specific purposes. As per this notification, 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, is chargeable to service tax. Simultaneously with the aforesaid Notification, in exercise of its powers conferred by Section 93 and 94, read with section 66A of the Finance Act, 1994, the Central Government made amendment in the Taxation of Services (Provided from Outside India and received in India) Rules, 2006 (hereinafter referred to as IOS Rules) vide Notification NO. 16/2010-ST dated 27.2.2010. By this amendment, definition of 'India' in Rule2(e) of the said Rules was substituted. By virtue of the amended definition of India, the appellant wrote to the Revenue tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Commissioner of Customs Vs. Nobel Asset Co. reported in 2008 (230) ELT 22 has held that the CS and EEZ of India is not a part of the "territory of India". The CBEC has also recognized this position and stated so in Circular NO.36/4/2001-ST dated 08.10.2001 as extracted in Para 3(c) above. (ii) With effect from 01.03.2002 (but till 07.07.2009) the provisions of the Act, were extended beyond the territorial waters of India but only to the designated areas in the CS & EEZ of India. These designated areas to which the Act was extended were the platform and structures specified in NotificationNO.S.O.429(E) dated 18.07.1986 and Notification No.S.O.643 (E) dated 19.9.1996 issued by the Ministry of External Affairs. (iii) With effect from 07.07.2009 (but till 27.02.2010) the provisions of the Act, were extended further by issue of Notification NO. 21/2009 dated 07.07.2009 to "installations, structures and vessels in the CS & EEZ of India". (iv) With effect from 27.2.2010, (but till 01.07.2012), the Act was further extended by issue of Notification NO. 14/2010-ST to the areas specified in column (2) to the table to the said Notification, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CS and EEZ of India do not pertain to construction of installations, structures and vessels, the same were not taxable notwithstanding the fact that they were received for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof. In order to be taxable, such services ought to have cumulatively fulfilled the following two conditions:- (a) They should have been for activities pertaining to construction of installations, structures and vessels; and (b) Such construction activities should have been for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof. The mere fulfillment of requirement (b) was not enough. Both the conditions were required to be fulfilled so as to render service taxable under Sr. No. 1 of Notification No.14/2010. The interpretation adopted by the Commissioner (Appeals) has the effect of rendering redundant otiose the use of the words to all activities pertaining to construction of installations, structures and vessels which is legally impermissible. 5. Insofar as the for construction services are concerned, the contention of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Government of India in the Ministry of Finance (Department of Revenue) notification No. 1/2002-Service Tax, dated the 1st March, 2002, published in the Gazette of India, Extraordinary, vide number G.S.R. 153(E), dated the 1st March, 2002, except as respects things done or omitted to be done before such supersession, the Central Government hereby extends the provisions of Chapter V of the Finance Act, 1994 (32 of 1994), to the areas specified in column (2) of the Table below, in the continental shelf and exclusive economic zone of India for the purposes as mentioned in column (3) of the said Table:- TABLE Sl. No. The areas in the Continental Shelf and the Exclusive Economic Zone of India Purpose (1) (2) (3) 1 Whole of continental shelf and exclusive economic zone of India 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 there of. 2 The installations, structures and vessels within the continental shelf and the exclusive economic zone of India, constructed for the purposes of prospecting or extraction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al gas. Vide the other Notification 16/2010-ST which was issued on the same day i.e. 27.2.2010, the definition of "India" under the Taxation of Services (Provided from outside India and Received in India) Rules, 2006 was amended to provide that 'India' includes 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. 9. Notification No. 16/2010-ST dated 27.2.2010 is issued under Sections 93 and 94 of the Finance Act read with Section 66A of the Finance Act. We find that the provisions of Section 93of the Finance Act empowers the Central Government to issue exemption notifications. The contention of the appellants is that in view of the restricted meaning of India as provided under Notification No. 16/2010-ST, the activities other than by or to the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India are not liable to service tax on reverse charge mechanism. As such only such activities which are consumed at the constructed installations, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res 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." The reading of the above amended Notification shows that 'India' includes 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 of production of mineral oil and natural gas meaning thereby that the provisions of Section 66A of the Finance Act read with the provisions of the Taxation of Services (Provided from outside India and Received in India) Rules, 2006 as amended, the service recipient is liable to pay service tax on reverse charge mechanism 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. 12. In the present case, the dispute is in respect of services for pre-construction activity and for construction activity and the appellant received taxable services from the foreign service provider. 13. In view of the above discussion, we find th ..... 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