9911796707
TMI Blog2024 (9) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... ated WAN; the foreign entities of the appellant, who in turn entered into agreements with projects executed in India, supply designs, drawings etc. relating to the projects. The appellants have thus submitted the drawings and designs in respect of projects like Jamnagar Export Project, KG-D6, Dabhol Project etc. - The case of the appellants is that the drawings and designs though prepared by them are whetted and improved upon by their overseas principals and only after their final approval, the same is uploaded in the Central Repository; they are preparing the designs as per the direction of their overseas entities under a contract; they are receiving the consideration thereof from their overseas entities and they have no communication, whatever, between them and the Indian companies who are using such drawings. It is found that learned Commissioner observes that during the period under consideration, export of service is also subject to the condition that the service is delivered outside India and is used outside India or service provided from India and is used outside India as the case may be ; as the services rendered by the appellant are tailor made to the Indian companies, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. S. S. GARG, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri A.R. Madhav Rao and Shri Mukunda Rao, Advocates for the Appellant Shri Aneesh Dewan, Authorised Representative for the Respondent ORDER M/s Bechtel India Pvt. Ltd., the appellants, are registered for providing taxable service i.e. Consulting Engineers Services as per Section 65 (105) (g); on conducting investigation by the officers of Anti- Evasion Branch of Service Tax Commissionerate, Delhi, it appeared to the Revenue the appellants have not discharged service tax on various services, provided by them during the period 01.04.2006 to 31.03.2011, in relation to various projects undertaken by them or their group companies; enquiries were conducted by writing various letters; appellants have also replied by various letters giving particulars about the services rendered/ received by them in respect of various projects like Jamnagar Export Project, KG-D6, Dabhol Project etc. On conclusion of the investigation, the Show Cause Notice dated 21.10.2011 was issued to the appellants seeking to recover service tax of Rs.2,22,70,103/- (service tax of Rs.2,17,33,744 + Education Cess of Rs.4,34,675 + Secondary and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the appellants were in the capacity of independent contractors of the foreign companies; in case of any deficiency, the responsibility was of the foreign companies and not the appellants; in all these contracts, there is no reference to any Branch office of any foreign entity in India. 3. Learned Counsel submits that the appellants are subsidiary of M/s Bechtel Corporation USA and provide Engineering Designs and Drawing Support Services exclusively only to Bechtel group for turnkey projects awarded anywhere globally, including by companies in India, to foreign entities. He submits that the appellant appoints a project engineer responsible for the work awarded to them, a team visits overseas entities offices for orientation and learning sessions; Detailed Design Engineering Services on the basis of drawings provided by the overseas Bechtel entities are prepared; the overseas entities of Bechtel open the Central Repository of Data Base and the appellant submits the final version of drawings and designs and other data in the Central Repository; the transfer of documents is through a dedicated Wide Area Network (WAN); final deliverable is done by their overseas masters; all commun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asstt. Commr., S.T., Delhi-III - 2018 (8) G.S.T.L. 32 (Del.) Commr. Of Central Tax V. M/S Singtel Global India Pvt. Ltd. - (Judgment Dated 06 September 2023 In SERTA 10/2023 Coca Cola India Pvt. Ltd. Vs Commissioner of C. Ex., Pune-III - 2009 (242) ELT. 168 (Bom.) Paul Merchants Ltd. Versus Commissioner of C. Ex., Chandigarh - 2013 (29) STR 257 (Tri. - Del.) M/S. Samsung India Electronics P. Ltd Versus CCE. Noida - 2015 (1) Tmi 1098 Microsoft Corporation (1) (P) Ltd. Versus Commr. Of S.T., New Delhi - 2014 (36) STR 766 (Tri. - Del.) Microsoft Corporation (India) Pvt. Ltd. Versus Commr. Of C. Ex., Delhi-III - 2018 (18) G.S.T.L. 465 (Tri. - Chan.) M/S. Fanuc India Pvt. Ltd. Versus C.C.E. S.T. - Bangalore-Ltu - 2020 (1) TMI 316 - Cestat Bangalore Vodafone Essar Cellular Ltd. V. Commissioner of C. Ex., Pune -III- 2013 (31) STR 738 (Tri. - Mumbai) All India Fedn. Of Tax Practitioners V Union of India - 2007 (7) STR 625 (S.C.) Collector Of Customs V. K. Mohan Co. Exports - 1989 (43) ELT. 811 (S.C.) 5. Regarding the other issues, learned Counsel for the appellants submits that the appellants paid service tax for the period 03.03.2009 to 19.05.2009, in terms of Notification No.9/2009-ST; l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.C.) Omega Financial Services v. Commissioner of C. Ex., Cochin - 2011 (24) STR 590 (Tri. - Bang.) 7. Shri Aneesh Dewan, learned Authorized Representative for the Department, reiterates the findings of the impugned order and submits that the appellants representing their overseas group companies, have in fact provided Consulting Engineers Services to the clients of the overseas group companies with respect to the specific projects of BHL and Reliance Group in India; therefore, they do not qualify as export of service under Rule 3(1)(iii) of Export of Service Rules, 2005, for non fulfilment of conditions; in terms of the Rules, the service shall be treated as export (prior to 01.03.2007) only if such services are provided to a recipient located outside India, services delivered outside India and the same is used outside India; with effect from 01.03.2007, services rendered shall be deemed as export if such service is provided from India and received outside India; in both cases, payment is received in convertible foreign exchange; with effect from 27.02.2010, it was further provided that the order for service should not be delivered by any commercial establishment or any office of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as rendered and consumed in India and therefore, cannot be treated as export of services. The case of the appellants is that the drawings and designs though prepared by them are whetted and improved upon by their overseas principals and only after their final approval, the same is uploaded in the Central Repository; they are preparing the designs as per the direction of their overseas entities under a contract; they are receiving the consideration thereof from their overseas entities and they have no communication, whatever, between them and the Indian companies who are using such drawings. 10. We find that learned Commissioner observes that during the period under consideration, export of service is also subject to the condition that the service is delivered outside India and is used outside India or service provided from India and is used outside India as the case may be ; as the services rendered by the appellant are tailor made to the Indian companies, they cannot be used outside India and therefore, to that extent, the services are not used outside India. We also find that Commissioner relies on CBEC Circular dated 13.05.2011 which clarified that used outside India should be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression was replaced w.e.f. 01.03.2007 by is provided from India and used outside India . The Circular dated 29.04.2009 issued by CBEC clarifies that the relevant factor is the location of the service receiver and not the place of performance and the phase used outside India is to be interpreted to mean that the benefit of the service should accrue outside India. The term used outside India , therefore, means that the service is provided to such a service recipient who is located outside India. It is the location of the service-recipient which determines where the service is used. The use of intangible services should be seen with respect to the location of the service recipient and not the place of performance. 47. In the present case, Arcelor India is a sub agent of Arcelor France which is an agent for the steel mills situated outside India. For procuring sale orders for the products manufactured by the foreign mills from customers in India, the requests of prospective customers identified by Arcelor India is forwarded to the foreign mills who, thereafter, directly get in touch with the Indian customer to determine the terms and conditions and execute a contract after which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clarified that as long as the party abroad is deriving benefit from service in India, it is an export of service. In the considered view of the 51. Court, the judgment of the CESTAT in Paul Merchants Ltd. v. CCE, Chandigarh (supra) is right in holding that The service recipient is the person on whose instructions/orders the service is provided who is obliged to make the payment from the same and whose need is satisfied by the provision of the service. The Court further affirms the following passage in the said judgment in Paul Merchants Ltd. v. CCE, Chandigarh (supra) which correctly explains the legal position : It is the person who requested for the service is liable to make payment for the same and whose need is satisfied by the provision of service who has to be treated as recipient of the service, not the person or persons affected by the performance of the service. Thus, when the person on whose instructions the services in question had been provided by the agents/sub-agents in India, who is liable to make payment for these services and who used the service for his business, is located abroad, the destination of the services in question has to be treated abroad. The destina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Tribunal in the case of M/s Fanuc India Pvt. Ltd. cited (supra) wherein the Tribunal after considering the export of service rules and the Circular No. 111/05/2009-ST dated 24.02.2009 has held that where the benefit of the services accrued outside India it will be termed as export of services. Therefore, the denial of refund on this ground is also bad in law. 14. Further, we find that in respect of the exemption claimed by the appellants towards the supplies claimed to have been rendered to M/s JERP Project, Jamnagar, learned Commissioner himself finds that the exemption contained under Notification No.09/2009 or 15/2009 is not applicable as in this case, the services have been provided by the assessee to the aforesaid overseas group company by electronic media in connection with M/s JERP Project of Reliance Group in India. We find that learned Adjudicating Authority did not use the same logic in respect of services rendered to other projects where the services undertaken by the appellants are similar in nature. In all the cases, the appellants have rendered services to their overseas entities by preparing the drawings and designs and uploading the same to the Central Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
