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2023 (3) TMI 15 - AT - Service TaxLevy of service tax - Export of services or not - consideration received for repair works done by the appellant on the rig / drill ship - case of appellant is that the services were rendered in a non-designated area and therefore they are not liable to service tax - applicability of N/N. 1/2002-ST dated 1.3.2002 - HELD THAT:- The provisions of Chapter V of Finance Act, 1994 applies only to designated areas in the continental shelf and exclusive economic zone of India. It is clear from the SCN as well as the OIO that the repair works were performed in the non-designated area of continental shelfs and exclusive economic zone. The provisions of Chapter V of the Finance Act, 1994 can only apply to the areas to which the Act is specifically extended. Therefore when the drill ship is located in an area which is outside the territorial purview of the Finance Act, 1994, there is no question of payment of service tax in respect of the maintenance and repair works carried out by the appellant on rig/drill ship. Similar issue was discussed in the case of M/S. GREATSHIP (INDIA) LTD. VERSUS COMMISSIONER OF SERVICE TAX, OIL AND NATURAL GAS COMPANY LTD. [2015 (4) TMI 1006 - BOMBAY HIGH COURT], where it was held that the said service cannot be said to be a service rendered to the installations, structures and vessels. Not only this, but the Respondent also in the order- in-original has noted that the appellant is discharging applicable service tax on the services received by installations, structures and vessels in the Continental Shelf and Exclusive Economic Zone of India but was not discharging the service tax on services consumed by the seabed of Continental Shelf of India. The territorial application of the service tax and the commencement of its application from 01.07.1994 and the change brought forth in the application w.e.f. 07.07.2009 has been discussed in the case of Reliance Industries Vs Commissioner of Service Tax, LTU Mumbai [2014 (1) TMI 257 - CESTAT MUMBAI], where it was held that Appellant had not provided any service regarding which the appellant had paid service tax on reverse charge mechanism in respect of any service provided or to be provided by or to such installations, structures and vessels or for supply of any goods connected with such activity to installations, structures and vessels within the continental shelf and the exclusive economic zone of India. Undisputedly, the repair, and maintenance work has been carried out in the non-designated area. From the discussions made, the demand cannot sustain and requires to be set aside - appeal allowed.
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