9911796707
TMI Blog2018 (11) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... eering Services to M/s Jayprakash Associates Limited (JAL). They had entered into an agreement with JAL on 01.11.2002 alongwith a Memorandum of Understanding dated 31.03.2012 vide which the appellant have undertaken the consultancy work in the field of tender preparation, planning, design and engineering works with respect to Hydro-electric Project in the state of J&K against a consideration of Rs. 22.50 crores. JAL established a project office in the State of J&K for carrying out the works at Baglihar Hydro-electric project. The appellant has paid service tax in lieu of rendering of consulting engineering services for the period 01.07.2012 to 31.03.2012. However, they got the knowledge that the services as rendered by the appellant to JAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of immovable property is a criteria to determine the taxable territory. Finally, he submitted that Branch Office of JAL is in the State of J&K, the project which was designed and constructed for which the consultancy service was given by the appellant lies in the State of J&K which is not part of the taxable territory of India. The confirmation of rejection of refund of the appellant is therefore liable to be set aside, the appeal is accordingly prayed to be allowed. The appellant has relied upon the following case laws: i) Bharat Petroleum Corporation Ltd. vs. CST, Noida 2018 (3) TMI 1428 -CESTAT Allahabad. ii) M/s Vivek Financial Focus Ltd. vs. CST, Delhi 2017 (9) TMI 418- CESTAT, New Delhi iii) British Airways vs. CCE (Adjn.) New ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. For the purpose, it is foremost important to look into the definition of taxable territory. As per Section 65(32) of the Finance Act, 1994: taxable territory means the territory to which the provisions of Chapter V of the Act apply. Section 64 of the Act speaks about the extent, commencement and application of this Chapter and according to this provision: Chapter V of the Act extends to the whole of India except the State of Jammu and Kashmir. It becomes clear from these two provisions that State of J&K is not within the taxable territory of India. Now for the adjudication, definition of services as mentioned in Section 65(45) of the Finance Act, 1994 acquires relevant. According to which: service means any activity carried out by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here such services are provided or deemed to have been provided or agreed to be provided deemed to have been agreed to be provided. (2) Any rule made under sub-section (1) shall not be invalid merely on the ground that either the service provider or the service receiver or both are located at a place being outside the taxable territory". Alongwith these provisions the rules under Place of Provision of Service Rules, 2012 acquire relevance. Rule 8 thereof has been considered by the authorities below for rejecting the claim of the appellant. Perusal of these rules which came into effect from 20.06.2012 shows that the rules have been framed under Section 66C of the Finance Act, 2012 for the purpose of definition of Place of Provision of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f recipient of service. As already discussed above, that JAL, though has Head Office in taxable territory but the provision of service was outside the taxable territory i.e. in the State of J&K. Hence, apparently this rule is not applicable to the present facts and circumstances. 8. We, therefore, hold that the adjudicating authority below have committed an error while invoking this rule under the garb of Rule 14 of these Rules. The two applicable rules in the present scenario are rule 3&5 (as discussed above). In accordance to Rule 14, Rule 5 has to prevail. However, seen from any of these rules, the Place of Provision of Service is J&K which, as discussed, is outside the taxable territory in accordance of Section 66B. The Department here ..... X X X X Extracts X X X X X X X X Extracts X X X X
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