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TMI Blog2018 (11) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... ent into the affairs of the respondent, Revenue was of the opinion that the respondent has received various services from persons situated outside India. They did not pay service tax on such services and the department felt that for the consideration remitted by the respondent to various foreign service provider, they will be liable to payment of service tax on reverse charge basis under the "Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 read with Rule 2(1)(d)(iv) of the said Rules. Accordingly, show cause notice dated 24.04.2008 was issued proposing to demand of service tax under Reverse Charge Mechanism. The issue was decided by issue of impugned order in which the Adjudicating Authority dropped most ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri N.K.Poddar. He reiterated the legal position that the no demand for service tax under the reverse charge mechanism can survive up to the date of enactment of Section 66A i.e. upto 17.04.2006. However, he submitted that even for the period 18.04.2006 to 31.03.2007, the respondent was not liable to pay service tax. He referred to various services rendered by the foreign associates as explained by the respondent in the reply to the show cause notice in para 7.9. He referred to Rule-3 of the Taxation of Service Rules, 2006 which specifies the services for which liability arises on reverse charge basis and submitted that the sub-Rule 3(i) will not be applicable to the respondent since these are in relation to immovable property situated in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provision of Section 66A specifically providing for such a scenario. The Hon'ble Supreme Court, in the case of Indian National Shipowners Association (Supra) has held that the service tax liability on taxable services provided by a person located outside India to a recipient in India would arise only w.e.f. 18.04.2006 i.e. the date of enactment of Section 66A ibid. In view of the said decision of the Hon'ble Supreme Court, we find no infirmity in the order passed by the lower authority in dropping the demand for service tax up to 17.04.2006. 7. Revenue, through this appeal, has challenged the dropping of service tax. Revenue has agitated that service tax liability on reverse charge mechanism would arise for the period 18.04.2006 to 31.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Provided further that where the taxable services referred to in sub-clauses (zzg), (zzh) and (zzi) of clause (105) of Section 65 of the Act, are provided in relation to any goods or material or any immovable property, as the case may be, situated in India at the time of provision of service, through internet or an electronic network including a computer network or any other means, then such taxable services, whether or not performed in India, shall be treated as the taxable service performed in India] (iii) Specified in clause (105) of section of the Act, but excluding.- (a) Sub-clauses (zzzo) and (zzzv); (b) those specified in clause (i) of the rule except when the provision of taxable services specified in clauses (d), (zzzc), and (zz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax if such services are received by the recipient located in India for use in relation to business or commerce. 9. In the grounds of appeal argued by the Revenue, it has been argued that many of the services under consideration in the present dispute, though performed outside India, were received by the respondent for use in relation to business or commerce. As such revenue is of the view that the findings of the Commissioner need modification. 10. As discussed above the dispute is limited to the service rendered during the period 18.04.2006 to 31.03.2007. As observed above, sub-rule 3(i) & 3(ii) does not appear to have any application in relations to services in dispute. But it is required to be examined whether the services rendered by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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