9911796707
TMI Blog2022 (11) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... /s Alstom India Ltd.) for the period January 2010 to June 2010, it appeared that the respondent had provided "Erection, Commissioning and Installation Services" to M/s National Hydroelectric Power Corporation Ltd., Uri, Jammu and Kashmir (i.e. M/s NHPC) without payment of any service tax, as the provisions of Chapter V of the Finance Act, 1994 were not applicable to the State of Jammu and Kashmir. However, it appears that such services to M/s NHPC were provided by the respondent by using Cenvated input-services that were also not covered under Rule 6(5) of Cenvat Credit Rules, 2004. It was further noticed that the Respondent was also not maintaining any separate account of input services, used for exempted services and taxable services, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Chapter V of the Finance Act, 1994. In the present case since the services of "Erection, Commissioning and Installation" which are otherwise taxable, is admittedly not taxable for the simple reason that the same has been provided within the State of Jammu & Kashmir. However, that does not take away the character of the same being " a service on which no service tax is leviable" to be kept outside the definition of "exempted services" under Rule 2(e) of CCR-2004. Therefore the conclusion drawn by the adjudicating authority in impugned order to the effect that since the services provided in J&K are clearly excluded from the provisions of Chapter V of the Finance Act, 1994 also does not fall under the definition of "exempted services" as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he service tax leviable thereon. In the present matter, clearly the services rendered in J&K are not taxable service and there is no specific exemption issued under the Service tax provisions in this regard. Therefore, the said services would not fall in the main clause of the definition. Further, the inclusive clause of the definition covers all such services on which no service tax is leviable. In said leg of the definition of exempted service cannot cover the transaction which are performed outside the taxable territory. In can cover only those service transactions which are performed in the taxable territory. Therefore, the services performed in J&K would not be covered in the said clause of the definition of exempted service, meaning t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mon input services used for rendering services in Jammu & Kashmir. Undisputedly the appellants have used common input services for providing services in State of Jammu & Kashmir and other parts of India. The proviso to sub-clause (2) of Rule 1 of Cenvat Credit Rules states that 'nothing contained in these rules relating to availment and utilization of credit of service tax shall apply to the State of Jammu and Kashmir'. Again, as per Section 64 of the Finance Act, 1994, the Act extends to the whole of India except the State of Jammu & Kashmir. Thus, there is no levy of service tax on the services provided in Jammu & Kashmir. The Department has construed or rather confused the services rendered in Jammu & Kashmir to be exempted services. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce becomes an exempted service when by notification or law, the service tax payable on such service is exempted. Rule 6(2) does not apply to a situation where the service provider renders both taxable services and services which are not subject to service tax. The law is silent in this regard. The Department cannot construe the services provided to Jammu & Kashmir as exempted services and press into application, in such situations, Rule 6 of Cenvat Credit Rules, 2004. As the services provided to Jammu & Kashmir are not subject to levy of service tax, whether such services would fall into the definition of 'output service' during the relevant period is itself doubtful. As per the definition of input service, only if the service provider uses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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