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TMI Blog2024 (2) TMI 1512X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Credit Rules, 2004, in order to avail of Cenvat Credit of specified taxes paid on the specified inputs/capital goods and Service tax, paid on the taxable service and for utilization of such Cenvat Credit towards payment of specified taxes leviable on the specified excisable finished goods. The appellants are engaged in production and clearance of finished excisable goods, principally falling under Chapter 28 of the First Schedule to the Central Excise Tariff Act, 1985. Aluminium Chloride, is one of the finished excisable goods, manufactured by the appellants and falling under Chapter 28 of the First Schedule to the said Tariff Act. The appellants are also engaged in exporting such Aluminium Chloride, to foreign countries. 1.2 In order to facilitate the foreign buyers and to promote their sales of Aluminium Chloride, in foreign country, the appellants, obtained ISO Tanks, on lease basis, from one M/s. Combipass S.A.S., France. The said ISO Tanks were maintained at Antwerp & Rotterdam, Belgium, since they were taken on lease. The purpose and object of maintaining the said ISO Tanks, in foreign country, was to export Aluminium Chloride, of the appellants, from their plant, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be recovered from them under proviso to Section 73(1) of the Finance Act, 1994. II. Why interest at the appropriate rates on amount of Service Tax mentioned in para (I) above should not be demanded and recovered from them under Section 75 of the Finance Act, 1994. III. Why penalty should not be imposed upon them under Section 78 of the Finance Act, 1994. 1.3 Another Show Cause Notice was also issued to the appellant through which the appellant was called upon to explain I. Why the Service Tax amounting to Rs. 7,72,558.00 from the period February-2015 to September-2015 should not be covered form them under proviso to Section 73 of the Finance Act, 1994. II. Why interest at the appropriate rate, on the amount mentioned as above should not be covered from them under Section 75 of the Finance Act, 1994. III. Why penalty should not be imposed upon them under Section 76 and 72 of the Finance Act, 1994. 1.4 The above-mentioned Show Cause Notices were adjudicated by the Joint Commissioner Central Excise, Customs & Service Tax- Bharuch, confirming the demands of Service Tax along with interest and penalties as proposed in the show cause notices. Being aggrieved by the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Order-in-Appeal as if whenever any service is received from foreign country into India, the Indian service recipient is always liable to pay service tax under Full Reverse Charge. Such an interpretation is a misconception about the provisions of Service Tax law and payment of service tax under Reverse Charge in respect of taxable services imported from foreign country into India. 2.3 The contention of the learned Counsel for the appellants is that if no service tax is payable on such a service as per other provisions of the service tax law, than the said Srl. Entry No. 10 cannot be utilised for demanding service tax, from the Indian service recipient for the service provided by the foreign service provider. 2.4 The learned Counsel for the appellant has also argued that whether the service received from foreigner into India is taxable or not in the hands of the Indian service recipient is not to be decided by the said Srl. Entry No. 10 of the Table to the Notification No. 13/2012-ST dated 20th June, 2012 and for the said purpose one has to refer to the Place of Provision of Services Rules, 2012 and ascertain whether service tax is payable on the service charges paid by India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellants referred to the provisions of Place of Provision of Services Rules, 2012. A close scrutiny of the Rules in the light of the activity that has taken place between the appellants and the foreigner would clearly reveal that this is a case of obtaining some goods on rental basis from the foreigner, appropriate Rule for the said purposes would be Rule 4 of the Place of Provision of Services Rules, 2012 which says that location of goods whether in Taxable Territory or Non-Taxable Territory will decide the taxability in respect of services pertaining to such goods. It has been established that the said ISO Tanks in the form goods were taken by the appellants on rental basis in the foreign country and throughout the period from beginning of this activity till today, the said ISO Tanks are lying in the "foreign country" which is non-taxable territory and therefore no service tax is payable on the rent paid by the appellants to the foreign ISO Tanks for obtaining the said ISO Tanks on lease rental basis. Therefore, no service tax is payable by the appellants. 2.10 The appellant cited the judgment delivered by the CESTAT West Zonal Bench at Ahmedabad in Service Tax Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act, 1994, the 'Business Auxiliary Service' has been defined, which is as follows: - "(19) "business auxiliary service" means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or [Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "service in relation to promotion or marketing of service provided by the client" includes any service provided in relation to promotion or marketing of games of chance, organised, conducted or promoted by the client, in whatever form or by whatever name called, whether or not conducted online, including lottery, lotto, bingo;] (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or [Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "inputs" means all goods or services intended for use by the client;] (v) production or processing of goods for, or on behalf of the client; or] (vi) provision of service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 65(19)(iv) i.e. 'procurement of goods or service provided on behalf of the client', and therefore it can be termed as "Business Auxiliary Service", and is taxable as such. 4.3 I have gone through the Order-In-Appeal. In para 5.2.1, it has been mentioned that the Rule 4 of Place of Provisions of Service Rules is meant for performance-based services, wherein the recipient of the service has to make the goods physically available to the service provider. In the instant case, the tangible goods, ISO tanks were made available by the service provider to the service recipient. Thus, the appellant used such ISO Tanks for storage and transportation of Aluminium Chloride, manufactured by the appellants. Accordingly, the contention of the appellant that Rule 4 is applicable in the present case, does not hold much water. There is no applicability of the Rule 4 (ibid) in the facts of the case and the department's contention in this regard to apply Rule 3 is correct and proper. I agree with the conclusion aggrieved at by the Commissioner (Appeals) in the Order-In-Appeal. 4.4 In the impugned order it is has also been mentioned that once the Place of Provisions of Service Rules, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to apply w.e.f. 1st July, 2012 and hence, w.e.f. 1st July, 2012, the provision Section 66C of the Finance Act, 1994 read with Rule 3 of the Place of Provisions of Service Rules, 2012 and Rule 7 of Point of Taxation Rules, 2011, shall be applicable to the present case. It has also been mentioned that it is well accepted legal principle that non-mentioning/wrong mentioning of the provisions would not vitiate the proceedings particularly when allegations and charges against the appellant are mentioned explicitly in the Show Cause Notice. In this reference the Authorised Representative cited the Judgment of Hon'ble Supreme Court in Fortune Impex vs. Commissioner- 2004 (167) ELT A 134 (SC). The Authorised Representative also cited judgments of Commissioner of Central Excise, Chandigarh Vs. Dabur India Ltd 2004 (178) ELT 819 (Tri. - Del.) and Standard Industries Limited Vs. Commissioner and Central Excise, Mumbai 2003 (158) ELT 623 and AVI. Steel Traders Vs. Commissioner of Central Excise-2010 TMT and 77446 (Delhi High Court). 4.7 It is also worth mentioning that in the instant case, when the appellants paid the service tax till 2013-14, then why suddenly they stopped the payment of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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