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TMI Blog2023 (8) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... at service tax was paid under category of transport of passenger by air services, but this fact needs to be verified. Non-payment of service tax under the reverse charge mechanism on payments made to foreign vendors for repair works aircraft outside India - HELD THAT:- Rule 3(ii) provides that subject to Section 66A of the Finance Act, the taxable services provided from outside India and received in India, shall, in relation to the taxable service specified in sub-clause (zzg) of section 65 (105) of the Finance Act be such services as are performed in India. The contention of the learned counsel for the appellant is that it is an admitted fact that the services were provided from outside India and, therefore, would not be leviable to service tax - this submission deserves to be accepted. It is only in a case where such services are performed in India that they would be leviable to service tax. In the present case, it is not in dispute that the services were provided outside India. Service tax, therefore, could not have been demanded from the appellant under the reverse charge mechanism. Denial of CENVAT credit of Rs. 33,96,323/- as the appellant had not submitted the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal Tax paid 2008-09 3,05,06,345 2,46,902 34,78,490 37,25,392 2009-10 2,06,77,432 0 21,29,776 21,29,776 2010-11 3,05,14,914/- 2,58,222 28,84,814 31,43,036 Total 8,16,98,691 5,05,124 84,93,080 89,98,204 3. The appellant during the period of dispute also incurred expenses for repairing aircrafts owned by it. The aircrafts were repaired by the foreign vendor at their own premises i.e. outside India and the appellant made payments to them in foreign currency. The payments made by the appellant comprises of repairing charges, ground handling charges and charges for obtaining permissions. The appellant claims that before an aircraft is sent abroad for repairs, the appellant is required to obtain permission from DGCA. In accordance with the permission accorded by the DGCA, the appellant sends the aircraft abroad and the repair ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of CENVAT credit of Rs. 33,96,323/- as the appellant had not submitted the relevant documents relating to credit availed by it. 7. A summary of the demand confirmed by the Principal Commissioner is as follows: Particulars Issue I (in Rs.) Issue II (in Rs.) Issue III (in Rs.) Total (in Rs.) Demand proposed as per show cause notice 1,11,83,803 41,34,017 1,12,54,892 2,65,72,212 Less: demand dropped in respect of CENVAT Credit - - 78,58,569 78,58,569 Less: Cum-Tax benefit allowed 11,17,882 - - 11,17,882 Less: ST paid by appellant; appropriated by the Department 26,07,435/- 5,93,052/- - 32,00,487 Balance Demand in Dispute 74,58,486 35,40,965 33,96,323 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are performed in India. 17. The contention of the learned counsel for the appellant is that it is an admitted fact that the services were provided from outside India and, therefore, would not be leviable to service tax. 18. This submission deserves to be accepted. It is only in a case where such services are performed in India that they would be leviable to service tax. In the present case, it is not in dispute that the services were provided outside India. Service tax, therefore, could not have been demanded from the appellant under the reverse charge mechanism. Issue No. III 19. The third issue that arises for consideration is as to whether the Principal Commissioner was justified in denying the CENVAT credit of Rs. 33,96,323/- for the reason that the appellant had not produced the relevant documents. 20. The contention of the learned counsel for the appellant is that after the hearing was concluded on 18.01.2016, the appellant had sent a letter dated 24.05.2016 which was received by the department on 26.05.2016 stating therein that it was ready and willing to produce original records to the officials deputed by the Principal Commissioner, at a day s notice, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow provided to the appellant to produce the relevant documents, particularly when before the order was delivered on 29.07.2016 and after the hearing was concluded on 18.01.2016, the appellant had offered to produce all the original documents. 25. The Principal Commissioner has stated in paragraph 7.5 of the impugned order that the appellant had not produced all the invoices of all the service providers. It is, therefore, appropriate that the matter is remanded to the adjudicating authority to permit the appellant to produce the records so that a fresh order on this aspect can be passed after examination of the documents. CONCLUSION 26. In view of the aforesaid discussion, the demand of service tax under issue No. II is set aside. As regards, issue No. I, the demand for the period from 1.04.2008 to 15.05.2008 is set aside. However, the adjudicating authority shall examine whether the appellant had paid service tax under the category of transport of passengers by air services and in case such tax had been paid, to appropriate the same. Regarding Issue No. III, the adjudicating authority shall provide an opportunity to the appellant to produce the relevant documents in conn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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