Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 526 - AT - Service TaxLevy of service tax - Survey and Exploration of Mineral service - payment made to GX Technologies Corporation, USA (GXT) and GGS Spectrum Limited, UK (GGS) for use of the data collected by them under an agreement with DGH of Government of India - amount of income tax deposited under the TDS Scheme on payment made to Dynamic Global Advisors Ltd., which is located outside India, for the services received - reverse charge mechanism. Survey and Exploration of Mineral’ for payment made to GX Technologies Corporation, USA (GXT) and GGS Spectrum Limited, UK (GGS) for use of the data collected by them - HELD THAT:- Under the pre-negative regime, services were specifically defined with respect to scope and coverage, for the purpose of levy of service tax. The Show Cause Notice, as far as the first issue is concerned, proposes to levy service on the Appellant under the category of ‘survey and exploration of mineral’. The taxable service of ‘survey and exploration of mineral’ and the expression ‘survey and exploration’ is defined under Section 65(105)(zzv) and 65(104a) of the Finance Act, 1994 - Also, CBEC Circular dated 17.09.2004, clarifies the activities covered under the service category of ‘survey and exploration of mineral’. In the present case admittedly, the seismic data is owned by GXT and GGS which they have acquired under a contract entered into by them with DGH of India. Further, it is also admitted position that the said data is available off-the-shelf and is made available on license to use basis, to the Appellant. The Appellant has not engaged service of GXT and GGS for the purpose of carrying out any specific survey or exploration activity for them. This can be equated with the Appellant seeking license to use any copy right OR IPR protected knowledge, available in the form of a book or a web portal - it is observed that GXT and GGS are located outside India, and while they may acquire data from or within India, at the stage of acquisition of data, the same is done for their own self. For making available that data to the Appellant, it is being done from outside India and therefore the activities of licensing of the acquired data are carried out from outside India. Thus, applying Rule 3 (ii) of the Service Import Rules, service tax will not be applicable on these services. Applicability of service tax on TDS (income tax) - HELD THAT:- Tribunal in catena of judgments has held that service tax cannot be levied on the portion of TDS not deducted and remitted to the government - In the present case, TDS is paid by the Appellant on its own account (out of pocket) and hence, respectfully following the ratio in the judgment in M/S. HINDUSTAN OIL EXPLORATION CO. LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE [2019 (2) TMI 1248 - CESTAT CHENNAI], it is held that service tax will not be applicable on the TDS deposited by the Appellant on their own account and paid to the Government, in addition to the consideration paid to DGAL. With respect to the judgment of this Hon’ble Tribunal in the case of SHELADIA RITES VERSUS CCCE & ST, VISAKHAPATNAM - I [2018 (12) TMI 1244 - CESTAT HYDERABAD] relied upon by the Authorised Representative for the Revenue, it is seen that the facts in this case are different in as much as there the TDS was deducted from the gross amount payable to the service provider. In the present case, however, the gross amount charged by the service provider under Section 67 of the Finance Act, 1994, will only attract service tax and not on the TDS amount. Since both issues are decided on merits, no finding on limitation is given, and it is left stand open. Appeal allowed.
|