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TMI Blog2018 (4) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... ided such service is partly performed in India - In the facts of the present case, the testing of spacer damper was wholly performed outside India in the foreign country by a foreign based testing agency. No part of the testing was provided in India for the reason that the testing agency is located outside India. Even though the goods on which test was conducted and certificate issued therefore were received by the recipient in India but the fact remains that the service of Technical Testing and analysis was only performed in abroad, no part of it was performed in India. Therefore the technical testing and analysis service on the reverse charge basis is not taxable in terms of Rule 3(iii) of Rules 2006 - Demand of Service Tax in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Being aggrieved by the order-in-original, the appellant filed appeal before the Commissioner (Appeals) who rejected the appeal, therefore the appellant is before us. 2. Shri R.B. Pardeshi, Ld. Counsel appearing on behalf of the appellant submits that they send their products namely Spacer Damper to Canada and China where the calibration testing on the said goods were conducted and the goods along with test certificate was sent back to the appellant. He submits that the technical testing and analysis service is covered under sub-clause (zzh) of Clause 105 of Section 65 of the Finance Act, 1994 performed only in the foreign country and no part of the said service was performed in India. Therefore in terms of Rule 3 (iii) of Taxation of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of revenue neutral, therefore the penalty under Section 77 78 are not imposable. On the issue of penalty he placed reliance on the following judgments: (i) Rajkumar Forge Ltd. Vs. Union of India 2010 (262) ELT 155 (Bom.) (ii) Commissioner of Central Excise, Indore Vs. Raymond Ltd. 2017 (6) G.S.T.L. 225 (S.C.) (iii) Kirloskar Oil Engines Ltd. Vs. Commissioner of Central Excise, Nasik 2004 (178) E.L.T. 998 (Tri.-Mumbai) (iv) Indofil Chemicals Company Vs. Commissioner of Service Tax, Mumbai-II 2016 (46) STR 507 (Tri.-Mumbai) (v) Commr. Of C. Ex. Cus., S.T. Siliguri Vs. Riddhi Siddhi Oil Industries 2012 (27) STR 482 (Tri.-Kolkata) (vi) Pushpam Pharmaceuticals Company Vs. Collector of C. Ex., Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in India) Rules, 2006, which reads as under: 3. Taxable services provided from outside India and received in India. Subject to section 66A of the Act, the taxable services provided from outside India and received in India shall, in relation to taxable services (i) specified in sub-clauses (d), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), (zzzh), (zzzr), [(zzzy), (zzzz) and (zzzza)] 1 of clause (105) of section 65 of the Act, be such services as are provided or to be provided in relation to an immovable property situated in India; (ii) specified in sub-clauses (a), (f), (h),(i), (j), (l), (m), (n), (o), (s), (t), (u), (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (z ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore were received by the recipient in India but the fact remains that the service of Technical Testing and analysis was only performed in abroad, no part of it was performed in India. Therefore the technical testing and analysis service on the reverse charge basis is not taxable in terms of Rule 3(iii) of Rules 2006. The said provision was prevailing upto 1.4.2011 as w.e.f.1.4.2011 vide Notification No. 23/2011 S.T. dt.31.3.2011 clause (zzh) was omitted under Rule 3(iii) of Rule 2006. The submission of the Ld. Counsel is that even after omission of Clause (zzh) in Rule 3(ii) of Rules, 2006. The service is not liable to tax for the reason that the service was only performed in non-taxable territory i.e. foreign country for this reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. Therefore it cannot be said that there is any malafide intention in non payment of service tax. Accordingly the penalty is not imposable under Section 77 78 by invoking Section 80. As per our above discussion , we pass the following order: (i) Demand of Service Tax in respect of Business Auxiliary Service is upheld. (ii) Demand of Service Tax in respect of Technical Testing and Analysis Service upto the period of 31.3.2011 is set aside. However the service tax demand on this service from 1.4.2011 onwards is upheld. (iii) The penalties imposed under Section 77 78 are set aside by invoking Section 80 of the Act. 8. The appeal is partly allowed in the above terms. (Pronounced in court on 23/03/2018) - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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