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TMI Blog2020 (1) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the appellants, hold that the services such as rendered by the appellants to their foreign principal fall under Export of Service Rules and are eligible for exemption in terms of Notifications, Export of Service Rules and the Circulars issued by CBEC from time to time for the entire period i.e. 01.07.2003 to 19.11.2003, 15.03.2005 to 30.09.2007 and 01.10.2007 to 30.09.2008 - Therefore, the issue is no longer res integra and the appellants are not liable to pay Service Tax during the said period under the heading Business Auxiliary Service . Maintenance or Repair Services - period 01.10.2007 to 30.09.2008 - penalties - HELD THAT:- The Learned Counsel for the appellants fairly conceded the applicability of such tax. Therefore, there are no reasons to discuss the applicability of the same - However, as requested by the appellants, looking into the facts and the circumstances of the case, the penalties are set aside. Appeal allowed in part. - Service Tax Appeal No. 890-891 of 2009 - FINAL ORDER NO. 20015-20016/2019 - Dated:- 7-1-2020 - MR. S.S GARG, JUDICIAL MEMBER AND MR. P. ANJANI KUMAR, TECHNICAL MEMBER Shri B.V. Kumar, Advocate for the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai 2010 (20) STR 821 (Tri. Mumbai) Mapal India Pvt. Ltd. Vs CCE, Bangalore 2011 (22) STR 454 (Tri. Bang.) SGS India Pvt. Ltd. Vs CST, Mumbai 2011 (24) STR 60 (Tri. Mumbai) 2.1. He further submits that Notification No. 06/99-ST dated 09.04.1999 granted exemption to the payments received in India in convertible foreign exchange; the exemption was rescinded w.e.f. 01.03.2003 by virtue of Notification No. 02/2003; even after such withdrawal the position w.r.t. export of services was clarified by CBEC vide Circular No. ST-56/5/3 dated 25.04.2003 stating that Service Tax is destination-based consumption tax and is not applicable on export of service and that export of services would continue to be tax free even after the withdrawal of exemption on payments received in foreign exchange w.e.f. 01.03.2003. Notification No. 21/2003-ST dated 01.03.2003 (effective up to 14.05.2005) provides that the payment received in India in convertible foreign exchange w.r.t taxable services is exempted from payment of Service Tax leviable thereon under Section 66 of Finance Act, 1994; the learned counsel submits that therefore there is no doubt on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... convertible foreign exchange. 2.3. Learned Counsel further submits that during the period 15.03.2005 to 17.04.2006, Business Auxiliary Services under Section 65 (105) (zzb) (vi) fall under Rule 3(3) of Export of Service Rules, if such taxable are used in or in relation to commerce or industry and the recipient of such service is located outside India. Therefore, the exemption is available to them in view of the Rules and CBEC Circular No. 111/05/2009 -ST dated 24.02.2009. From 18.04.2006, the Business Auxiliary Services rendered by the appellant to Fanuc Ltd., Japan still qualifying as export of service as they satisfied the following conditions: such services are provided to a recipient located outside India; such services are delivered outside India and used outside India; payment of such services are received by the service provider in convertible foreign exchange. 2.4. Learned Counsel further submits that as the services rendered by them are covered under of export of services and therefore, demand amounting to ₹ 4,99,01,239/- and ₹ 1,99,44,422/- vide above SCNs is not sustainable and accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be read harmoniously so as to avoid contradictions within a legislation. Keeping this principle in view, the meaning of the term used outside India has to be understood in the context of the characteristics of a particular category of service as mentioned in sub-rule (1) of rule 3. For example, under Architect service (a Category I service [Rule 3(1)(i)]), even if an Indian architect prepares a design sitting in India for a property located in U.K. and hands it over to the owner of such property having his business and residence in India, it would have to be presumed that service has been used outside India. Similarly, if an Indian event manager (a Category II service [Rule 3(1)(ii)]) arranges a seminar for an Indian company in U.K. the service has to be treated to have been used outside India because the place of performance is U.K. even though the benefit of such a seminar may flow back to the employees serving the company in India. For the services that fall under Category III [Rule 3(1)(iii)], the relevant factor is the location of the service receiver and not the place of performance. In this context, the phrase used outside India is to be interpreted to mean that the bene ..... X X X X Extracts X X X X X X X X Extracts X X X X
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