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TMI Blog2009 (5) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... side India. The refund claim has been rejected by the lower authorities and hence the appeal. 2. The short question to be decided is whether service tax is payable by the recipient when the service is performed fully outside India. 3. Shri Khandar Dholakiya, Assistant General Manager - Indirect Taxes, appeared on behalf of the appellants. He submitted that the refund claim has been rejected by the lower authorities on the ground that they are liable for payment of service tax irrespective of the service having been fully performed outside India. According to him service tax liability itself does not arise when the service is not performed in India. The provisions in the rules which provide that when service is partly performed in India an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service shall be determined under section 67 of the Act and the Rules made thereunder". 5. I am unable to agree with the argument advanced by the lower authorities that the above proviso would mean that if the services are fully performed outside India the provider is liable to pay tax and because of the provisions shifting the liability to the receiver the appellants are liable. The observations of the Commissioner (Appeals) in para 5.6 are reproduced below: "5.6 The appellant's interpretation that the above rule is applicable only to the services which are partly performed in India and, therefore, no service tax is required to be paid by them as services received by them were fully performed outside India is not correct. I find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The levy of the service tax is only on services which are rendered in India and where taxable event takes place in India. If the view of the Commissioner (Appeals) as rendered in this order is accepted, the services rendered all over the world to the Indians/Indian Companies where the reverse charge mechanism is applicable becomes chargeable to service tax. Where reverse charge mechanism is not applicable, the service tax would not be liable. The reverse charge mechanism basically shifts the burden of service tax to the receiver and if there is no liability on the service provider, the question of shifting the charge does not arise. Therefore, I find the interpretation given by Commissioner (Appeals) unacceptable and accordingly allow the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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