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2013 (2) TMI 433 - Commissioner - Service TaxShip Management Service vs. Business Support Service – registered for Business Auxiliary Services, Good Transport Agency, Ship Management Services and Renting of Immovable Property services - Assessee was in agreement with Eagle Ship Management Private Limited, an overseas Company - to provide facilities like Office space, telephone, secretarial assistance and other facilities at assessee’s office premises - As per the agreement effective from 1-9-2006 to 31-8-2009, assessee was appointed as an agent to the principal, M/s. Red Eagle Ship Management Pvt. Ltd., a company incorporated in Singapore – Held that:- Primary and essential nature of service is providing crews to the ships; that ship management service under Section 65(96a) includes engagement or providing crews; that crew members of the ship fall under the category of seafarers since these activities are specifically included under Ship Management Service under Section 65(96a) of the Act. When a taxable service is, prima facie, classifiable under two or more sub-clauses, Section 65A(2)(a) says “the sub-clause which provides the most specific description shall be preferred to sub-clauses providing a more general description. There is a specific inclusion of providing of crews under Section 96(96a)(ii) meant for ship management service. Whereas there is no such inclusion in BSS. Therefore the supply or providing of seafarers to ESMPL, a foreign Company, would definitely classifiable under ship management service. Further they fall under Export of service as these services satisfy the condition prescribed in terms of Rule 4 read with Rule 3 and hence can be exported without payment of tax. C.B.E. & C.’s Circular No. 111/05/2009-S.T., dated 24-2-2009, it is clarified that for category III services (Rule 3(1)(iii)) the relevant factor is the location of the service receiver and not the place of performance and in the instant case it is admitted that the location of service receiver is outside India – Aappellant is not liable to pay Service tax for the surviving demand period. Notification No. 4/2004-S.T. clearly exempts all taxable services provided to a Developer of SEZ or a SEZ unit for consumption of the services within such SEZ. - whether the Steamer Agent’s services could be treated as consumption of services within SEZ units - Just like Courier, Telecommunication and Manpower recruitment services, this Steamer Agent’s service is also provided by service providers from outside SEZ and the provision of service commence from outside the SEZ premises, but ends within the SEZ units and construed to be consumed within SEZ premise. Invocation of extended period of time – Appellant are filing returns regularly and their unit is audited periodically, the Department is aware about the fact of the services rendered by them. Thus there is no suppression of facts with an intent to evade payment of tax - proviso to extended period of time cannot be invoked. Thus the demand in the instant case is partly hit by limitation of time and the period w.e.f. 1-4-2007 alone will survive as it is within a period of one year from the relevant date.
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