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2018 (4) TMI 776 - AT - Service TaxImport of services - Place of provision of services - Reverse charge mechanism - place of provision of service - Rule 3 of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 - appellant have received Business Auxiliary Service(BAS) and Technical Testing and Analysis Service (TTA) from foreign based firms during the period from 25.5.2009 to 22.6.2011 and 20.5.2010 to 30.3.2012 respectively - non-payment of service tax - penalty. Held that: - the technical testing analysis service covered under sub-clause (zzh) received from outside India is taxable provided such service is partly performed in India - In the facts of the present case, the testing of spacer damper was wholly performed outside India in the foreign country by a foreign based testing agency. No part of the testing was provided in India for the reason that the testing agency is located outside India. Even though the goods on which test was conducted and certificate issued therefore were received by the recipient in India but the fact remains that the service of Technical Testing and analysis was only performed in abroad, no part of it was performed in India. Therefore the technical testing and analysis service on the reverse charge basis is not taxable in terms of Rule 3(iii) of Rules 2006 - Demand of Service Tax in respect of Technical Testing and Analysis Service upto the period of 31.3.2011 is set aside. However the service tax demand on this service from 1.4.2011 onwards is upheld. As regard Business Auxiliary Service which was provided by foreign based company to the appellant and received by the appellant in India, the same is liable to service tax - demand upheld. Penalty - Held that: - the grave interpretation Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, was involved and the various litigation has been taken place on this issue - penalty set aside. Appeal allowed in part.
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