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TMI Blog2024 (8) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... her irrespective of classification these services can be considered as export of services under Export of Service Rules, 2005 ? - HELD THAT:- As per Export of Service Rules, 2005 under Rule 3 (1)(ii) proviso, it clearly reads as Provided that where such taxable service is partly performed outside India, it shall be treated as performed outside India; therefore, in the instant case, a service is partly performed outside India and it has to be treated as performed outside India. Hence, as rightly claimed by the appellant, the services are to be treated as Export of Service. Similarly, in the case of COMMISSIONER OF SERVICE TAX, MUMBAI-III VERSUS M/S. SGS INDIA PVT. LTD. [ 2014 (5) TMI 105 - BOMBAY HIGH COURT] the Hon ble High Court observed ' the Tribunal takes a view that if services were rendered to such foreign clients located abroad, then, the act can be termed as export of service . Such an act does not invite a Service Tax liability.' Whether facts were misrepresented/suppressed so as to invoke extended period and impose penalty under various Sections of the Finance Act, 1994? - HELD THAT:- It is a fact that the appellant has been filing Service Tax returns regularly an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s customers across the world. As a part of the agreement, UL Inc is required to undertake testing service of all the subsidiaries of its customers. In case, these subsidiaries are located in India, the services are performed on behalf of the parent company by UL India Pvt. Ltd. (the assessee). The companies whose operations are examined for the purpose of certification do not have any sort of contract with the appellant. Based on the review report sent by us, UL Inc would issue certificate to the customers in India . 3. Based on the above reply, the Commissioner held that it is an admitted fact that the appellant is rendering technical testing and inspection services at the premises of their Indian customers . Further, referring to the definition of Technical Inspection and Certification Services under Section 65 (108) of the Finance Act, 1994 read with the definition of Taxable Services as defined under 65(105)(zzi), it is held that the services rendered by the appellant are rightly classifiable under Technical Testing and Inspection Services . The Commissioner further observed that the appellant had not disputed the fact of providing the said services, however, their only objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers nor there is any flow of consideration between the end customer and the appellant. Moreover, the end certification is done only by the parent company and no certification is issued by the appellant which is an admitted fact. Relying on the decision of the Cricket Club of India Ltd. Vs. Commissioner: 2015 (9) TMI 1389 CESTAT Mumbai, it is stated that there has to be a service provider and service recipient to categorise any service, which is absent in the present case. It is also submitted that services are in the nature of Business Auxiliary Service covered by clause(vi) of Section 65(19) or it could be considered only as a Consulting Engineer Service as defined under Section 65(31) of the Finance Act, 1994. 4.1 The learned counsel also submits that the classification of services rendered by the appellant fall under Rule 3(1)(iii) of Export of Service Rules, 2005 because the services have been provided to service recipient located outside India, service is delivered and used outside India for which payment is received in convertible foreign exchange. It is further submitted that Circular No.111/05/2009-ST dated 24.02.2009 explains the phrase Used outside India to include all ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y by a UL India, the appellant. As per the Corporate Services Agreement under the scope of the services 1.1 under clause (c) and (d) it read as: (c) Assess the results of commercial inspections and testing services; (d) Assess inspections of customer manufacturing facilities and/or products to determine whether relevant UL or other requirements are met or continue to be met; 6.2 As per the definition of Technical Inspection and Certification Services defined under Section 65 (108) reads as: Inspection or examination of goods or process or material or any immovable property qualifies or maintains the specified standards, including functionality or utility or quality or safety or any other characteristics or parameters, but does not include any service in relation to inspection or certification of pollution levels . 6.3 Further vide Section 105(zzi), the Taxable Service is defined as taxable service means any service provided or to be provided to any person, by a technical inspection and certification agency, in relation to technical inspection and certification . 6.4 As seen from the flowchart, the appellant enters into a contract for testing and certification service and on the dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ackets and figures sub-section (1) and sub-section (2) of section 94 , the words and figures sections 93 and 94 shall be substituted: 3. In the said rules, for rule 3, the following rule shall be substituted, namely: 3. Export of taxable service. - (1) Export of taxable services shall, in relation to taxable services, - (i) specified in sub-clauses (d), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), (zzzh) and (zzzr) of clause (105) of section 65 of the Act, be provision of such services as are provided in relation to an immovable property situated outside India; (ii) specified in sub-clauses (a), (f), (h), (i), (j), (l), (m), (n), (o), (s), (t), (u), (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), (zzzf) and (zzzp) of clause (105) of section 65 of the Act, be provision of such services as are performed outside India: Provided that where such taxable service is partly performed outside India, it shall be treated as performed outside India; (iii) specified in clause (105) of section 65 of the Act, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , hence the service cannot be termed as export outside India . Based on the above contention of the Revenue the Tribunal observe as follows: 8. Reading of the above provisions of Export of Services Rules, 2005 (hereinafter referred to as the Rules ) makes it amply clear that the taxable service specified in sub-clause (zzh) of Clause (105) of Section 65 of the Act is covered under Rule 3(1)(ii) of the Rules. The performance is not complete until the testing and analysis report is delivered to the client. In the present case, when such reports were delivered to the clients outside India, it amounts to taxable service partly performed outside India. The performance of the taxable service has no validity/sanctity unless its report is submitted to the service receiver/client. The clients do not have any value for merely performance if no report is delivered to them. Consideration of the service is received by the appellants only when they deliver the study report and the certificate of the testing and analysis of the clinical trials conducted by them. Thus, delivery of the report is an essential part of their service and the service is not complete till they deliver the report. The rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice is partly performed outside India, it shall be treated as performed outside India; therefore, in the instant case, a service is partly performed outside India and it has to be treated as performed outside India. Hence, as rightly claimed by the appellant, the services are to be treated as Export of Service. Similarly, in the case of Commissioner of Service Tax, Mumbai III Vs. M/s. SGS India Pvt. Ltd. 2014 (34) S.T.R. 554 (Bom.) the Hon ble High Court observed as follows: In the present case, the Tribunal has found that the assessee like the respondent rendered services, but they were consumed abroad. The clients of the respondents used the services of the respondent in inspection/test analysis of the goods which the clients located abroad intended to import from India. In other words, the clients abroad were desirous of confirming the fact as to whether the goods imported complied with requisite specifications and standards. Thus, client of the respondent located abroad engaged the services of the respondent for inspection and testing the goods. The goods were tested by the respondents in India. The goods were available or their samples were drawn for such testing and analysi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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