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TMI Blog2014 (7) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness or commerce in India. - the services are taxable - decided against the assessee. Levy of penalty - revenue neutral situation - Held that:- when the situation is revenue neutral and the appellant manufacturer is entitled to CENVAT Credit, it cannot be said that there was an intent to evade duty and extended period can be invoked. - penalty imposed on the appellant cannot be sustained - decision in the case of of M/s Enercon India Ltd. Versus CCE Daman [2012 (7) TMI 196 - CESTAT, AHMEDABAD] followed - appellant’s case is fully covered by the provisions of Section 73(3) of the Finance Act, 1994 and the Revenue should not have issued show casue notice to the appellant for imposition of penalty. - Decided in favour of assessee. - Appeal No. : ST/11284/2013 - ORDER No. A/11152/2014 - Dated:- 27-6-2014 - Mr. H.K. Thakur, J. For the Appellant : Shri Anand Nainawati, Advocate For the Respondent : Shri Jitendra Nair, A.R. JUDGEMENT Per : Mr. H.K. Thakur; This appeal emanates from Order-in-Appeal No. CCEA-SRT-II/ SSP-280/ u/s 85 (4) (Final Order) dated 18.02.2013, passed by the Commissioner (Appeals), Central Excise, Customs and Service Tax, Surat-II. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e) Essar Steel Limited Vs. CCE Surat - [2009 (13) STR 579 (Tri. Ahmd.)]; (f) Enercon (India) Ltd. Vs. CCE Daman Final Order No. A/ 925/ WZB/ AHD/ 2012 S/ 1157/ WZB/ AHD/ 2012 dated 13.06.2012; and (g) Varsan Ispat Ltd. Vs. CCE Rajkot - [2010 (19) STR 359 (Tri. Ahmd.)]. (h) That the Surat-II Commissionerate has no jurisdiction to adjudicate the show cause notice as alleged service provided by foreign service providers, if any, is admittedly provided outside the territory of India. Thus the show cause notice issued to the appellant is null and void ab-initio and hence liable to be set aside on this ground alone. (i) That the essential characteristic of service is that it cannot be owned, possessed and transferred from one place to another. Services are transitory and consumed as they are produced. In the instant case, the demand of service tax is on the activity undertaken by the foreign service-providers outside India. The said foreign service-providers do not have any office in India and they have not visited India. The said service is received by the appellant outside India. The service is used and consumed by the appellant outside India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em from foreign service providers outside India and consumed outside India in respect of the Foreign Currency Term Loan. For proper appreciation of the issue, the provisions of Section 66A of the Finance Act 1994 are reproduced below: SECTION [66A. Charge of service tax on services received from outside India. - (1) Where any service specified in clause (105) of section 65 is, - (a) provided or to be provided by a person who has established a business or has a fixed establishment from which the service is provided or to be provided or has his permanent address or usual place of residence, in a country other than India, and (b) received by a person (hereinafter referred to as the recipient) who has his place of business, fixed establishment, permanent address or usual place of residence, in India, such service shall, for the purposes of this section, be taxable service, and such taxable service shall be treated as if the recipient had himself provided the service in India, and accordingly all the provisions of this Chapter shall apply : Provided that where the recipient of the service is an individual and such service received by him is otherwise than fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 67 of the Act and the rules made there under; (iii) specified in clause (105) of section 65 of the Act, but excluding, - (a) sub-clauses (zzzo) and (zzzv); (b) those specified in clause (i) of this rule except when the provision of taxable services specified in clauses (d), (zzzc), and (zzzr) does not relate to immovable property; and (c) those specified in clause (ii) of this rule, be such services as are received by a recipient located in India for use in relation to business or commerce. 6.1 From the above provisions it transpires that foreign service providers have provided to the appellant taxable service as defined in section 65(105)(zm), which falls under third category of services contained in Rule 3 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. According to these Rules, if the services specified therein are received by a recipient located in India for use in relation to business or commerce, then these services are deemed to have been provided from outside India and received in India. It is further observed that the place of receiving/consuming service is immaterial. Evidently, the appellant (recipient) is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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