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TMI Blog2014 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ering be it feasibility study, detailed designing, construction, civil, mechanical, electrical engineering etc. The contention of the appellant that the Consulting Engineer Service more specifically describes the service provided by them and is the correct classification in terms of Section 65A (2) (a) for determination of classification is accepted. - the service provided by M/s. Bechtel comes under the category of Consulting Engineer Service. Offshore Services and levy of tax - Held that:- Keeping aside the peripheral activities of deputing personnel to India, the demand of service tax from a foreign entity is not valid especially when Revenue has not put forth any evidence that the services provided under the Agreement were not provided offshore. - Even if Revenue's stand (although Revenue's stand is not very clear) is that service has been provided from offshore territory to India, we find it is a settled matter that Service Tax on services provided by a service provider located outside India to a recipient in India is leviable only from 18.4.2006 with the introduction of Section 66A. - Decided against Revenue. - Appeal No. ST/175/2007 In ST/CO-68/2008 - Final Order No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such as organizing workshops, preparing project plan and master schedule, preparing project procedures manuals, preparing draft prequalification documents, construction agreements etc. and making available and releasing employees to work on the project. Therefore, the services provided under this Agreement can by no means be called Real Estate Agent Service as they are an engineering firm rendering services in various spheres of engineering which can only be classified under category of Consulting Engineer's service as they provide offshore technical support overseas and not in India. According to the appellant, the Agreement does not say that the technical support has been performed in India. To justify their stand on classification, they relied on CBEC Circular No. 49/11/2002-ST dt. 18.12.2002 which states: For any civil construction work to commence, a lot of preparatory work is required, e.g. soil testing, survey, planning, designing, drawing, etc. Once the design and drawings are completed by the construction company, it always seeks the approval of the client before proceeding with the construction. If the client suggests some changes they are incorporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classified under Consulting Engineer Service as it occurs first among the sub-clauses which equally merit consideration as stipulated in Section 65A(2) (c). 5. On the issue of taxability, Learned Counsel stated that firstly, as they provided services offshore the same were not taxable as Service Tax Act extended to Indian territory alone. However, even it is considered that services were provided from overseas to a recipient in India, Section 66A introduced w.e.f. 18.4.2006 provided for the first time the legal validity to charge of service tax on services provided by a service provider located outside India to an Indian recipient. But the period in question in their case is 25.01.2001 to 08.02.2002. Therefore during this period even service provided from offshore to a recipient in India was not taxable. In any case, during the material period, they had no business establishment in India for the rendition of services in India. It was contended that Revenue has not established factually that any service was rendered was not offshore service. Further in terms of Rule 2 (d) (iv) of the Service Tax Rules, in case of taxable service being provided by non-resident not having any offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and compute services), and making available and releasing employees to work on the project. Bechtel Shall, in addition, provide recruitment, training, long term career development support for staff working in India and elsewhere, together with procedures, research and development, technical standards, software systems and software development and updating etc. as required by the Project. Bechtel shall also provide a corporate overview and direction from time to time as required or requested. If such services are provided by Affiliates, Bechtel shall retain full and complete responsibility for the services so arranged. Offshore technical support shall be provided in the following areas: Organize Programming Workshop(s) Analyze and document the results of Programming Workshop(s) Review current design and construction documentation status Prepare draft Project Implementation Plan Prepare draft Project Automation Plan Prepare draft Project Master Schedule Prepare draft Contracting Strategy Prepare draft Project Procedures Manual Prepare draft Prequalification Documents Prepare initial draft Consultant and Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be related to rendering service in relation to sale, purchase, leasing or renting of Real Estate. However, the activities of a Consulting Engineer are more comprehensive in scope as they cover all disciplines of consultancy and engineering be it feasibility study, detailed designing, construction, civil, mechanical, electrical engineering etc. Even Board's letter F.No. B43/5/97-TRU dt. 2.7.1997 (supra) provides the expansive scope of this service to include activities related to feasibility study, pre-design services, basic design engineering, detailed design engineering, construction supervision and project management, manpower planning and training etc. to name some. This wide gamut of the detailed activities can only be provided by an engineering company which have expertise to deal with all disciplines of engineering. On the other hand, Real estate service is a service provided by a Real estate agent. Real estate agent in turn, means a person engaged in rendering any service in relation to sale, purchase, leasing or renting of Real Estate. The doubt which has arisen in the present case is because of the definition of Real Estate Consultant which means a person who render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held above that the service provided by M/s. Bechtel is classifiable under Consulting Engineer Service. 12. We now take up the second issue in this case, that of liability of service tax. The appellant's contention is that they have provided services offshore. We note that Revenue is not disputing this. No evidence has been provided by Revenue to establish that the services provided are not offshore services. In fact all papers addressed to Bechtel namely show cause notice, adjudication order have been sent to the appellants address overseas. This establishes that the appellants do not have a business establishment in India. The question arises, whether for the material period, i.e. Jan. 2001 - Feb. 2002, it is legally valid to demand service tax from Bechtel Overseas Corporation when the Service Tax Law was only applicable to the territory of India. Keeping aside the peripheral activities of deputing personnel to India, the demand of service tax from a foreign entity is not valid especially when Revenue has not put forth any evidence that the services provided under the Agreement were not provided offshore. 13. Even if Revenue's stand (although Revenue's stand is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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