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Service Tax - Case Laws
Showing 201 to 220 of 2349 Records
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2014 (12) TMI 332
Erection, installation & commissioning service - Penalty u/s 76, 77 & 78 - Held that:- Commissioner in this order has confirmed the service tax demand relying upon the Board s Circular No.123/05/2010-TRU dated 24.05.2010 wherein it has been clarified that installation of transfer sub-stations undertaken is taxable under Section 65(115)(zze) as ‘erection, installation or commissioning service’. The Commissioner, however, in this order has not considered the notification no.45/2010-ST dated 20.07.2010 issued under Section 83 of the Finance Act read with Section 11C of the Central Excise Act, 1944
Since during the period of dispute upto 21.06.2010, there was a prevailing practice of not charging service tax on the taxable services, relating to distribution of electricity provided by a person, the Central Government by the issue of this notification has directed that in respect of such activity, the service tax would not be chargeable upto 21.06.2010. According to the appellant, their activity is covered by the above notification but the applicability of this notification has not been considered by the Commissioner. In view of this, the Commissioner’s order is set aside and the matter is remanded to the Commissioner for de novo adjudication after hearing the appellant - Decided in favour of asssessee.
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2014 (12) TMI 331
Rectification of mistake - Opportunity of hearing not granted - Held that:- appellants were required to be given an opportunity for being heard if the impugned order had the effect of enhancing the assessment or reducing the refund or otherwise increasing the liability on the assessee. None of these consequences followed as a result of the impugned order and therefore the appellants contention that the order is not sustainable because they were not given an opportunity for being heard is obviously untenable. The appellants have nowhere argued that the adjudication order is not based on the correct appreciation of the records relating to that adjudication presented before the adjudicating authority. That being the case it is certainly not a case of mistake apparent from the record and therefore there is no infirmity in the impugned order dated 08.01.2008 and the same is legal and proper - Rectification denied.
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2014 (12) TMI 330
Denial of refund claim - Export of services - Discrepancy in FIRCs produced and the export undertaken - Notification No. 5/2006 dated 14/03/2006 - Revenue contends that Notification No. 5/2006 dated 14/03/2006 in clause (b) of the opening paragraph states that credit shall be allowed in respect of inputs or input service used 'in' providing output service which is exported without payment of tax - Held that:- Certificates have been corrected by the collecting bank and therefore, this objection would no longer be sustainable. However, the correct certificates were not available before the lower authorities when they rejected the claim and, therefore, the matter is remanded back to the refund sanctioning authority for consideration of the revised FIRCs now obtained by the assessee-appellant from the collecting bank and after considering the same, refund shall be granted to the appellant as per law.
In any case, the department has not objected to the assessee-respondent taking the credit at the relevant time and the objection has been raised only at the time of filing of the refund claims. There cannot be two different yardsticks; one for permitting the credit and the other eligibility for granting credit. Whatever credit has been permitted to be taken, the same are permitted to be utilized and it is not possible to have two provisions, one for grant of refund or as rebate. Without questioning the credit taken, the eligibility to refund cannot be questioned. - Following decision of Commissioner of Service Tax, Delhi vs. Convergys India Pvt. Ltd. [2009 (5) TMI 50 - CESTAT, NEW DELHI] - Decided in favour of assessee.
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2014 (12) TMI 329
Business Auxiliary Service - services rendered to sugar factory in relation to harvesting and transportation services of sugarcane - Benefit under Notification No. 13/2003 ST or 14/2003 ST - penalty u/s 76, 77 & 78 - Held that:- Prima facie we are of the view that the appellant is not eligible for the benefit under Notification No. 13/2003-S.T. as the activity involved herein is harvesting of sugarcane and transportation of sugarcane from the fields to sugar factory. It is not in relation to sale or procurement of sugarcane and, therefore, Notification No. 13/2003-S.T. does not appear to be applicable to the facts of the present case.
As regards the benefit under Notification No. 14/2004-S.T., the service has to be rendered in relation to agriculture. In the instant case the service has been rendered to the sugar factory and sugar is a manufactured product. Therefore, it cannot be said that the said service has been rendered to the client in relation to agriculture. Further, there is nothing available on record to show that the appellant was acting as a pure agent on behalf of the clients. The appellant was rendering service to third party namely, sugar factory, and the service was not rendered to the harvesting contractor or the transport contractor. The appellant was rendering the service by engaging harvesting contractors and transport contractors. Therefore, we are of the view that the appellants have not made out a prima facie case for complete waiver of pre-deposit of the dues adjudged. - Partial stay granted.
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2014 (12) TMI 328
Levy of Penalty u/s 76 and 78 - short payment of service tax - Held that:- As regards penalty u/s. 78 of the Finance Act, 1994, according to Sec. 73 of the Finance Act, when shortfall of payment occurs because of suppression/mis-declaration if the assessee paid the amount with interest and 25% of the tax towards penalty before issuance of show cause notice, further proceedings need not be initiated. In this case, but for the investigation taken up by the Revenue, appellant would not have paid the amount of service tax as has been demanded. On the ‘Outdoor Caterer’ service, the appellant has not paid service tax at all and the appellant had also not paid the correct amount of service tax on the consideration received for the services rendered by them over a few years. In such a situation, penalty u/s. 78 is imposable and has been correctly imposed.
Coming to penalty u/s. 76 of the Finance Act, 1994, there are decisions taking a view that penalties are imposable u/s. 76 & 78 of the Finance Act, 1994 prior to April, 2008 when Section 78 was amended to provide for no penalty u/s. 76 when penalty has been imposed u/s. 78. However, in this case, taking note of the fact that total amount short-paid is less than ₹ 50,000/- and it has occurred for a period of three financial years and obviously the appellant is not a big service provider. Moreover, as soon as the omission was pointed out, the appellant paid the service tax with interest. Further, it is also found that the appellant had correctly calculated the service tax payable by them with interest. The action of the assessee for verification of records before initiation of the proceedings would show that the omission could have occurred due to ignorance/improper accounting. Therefore, I find that it can be said that the appellant has shown reasonable cause for non-imposition of penalty u/s. 76 of the Finance Act, 1994 - Decided partly in favour of assessee.
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2014 (12) TMI 327
Penalty u/s 78 - Default due to ill management of sick industrial unit - Held that:- It is a case of sick industrial unit. The default had occurred during the management of sick industrial unit. The unit was taken over but the appellant could not run it profitably and accordingly they surrendered the lease after a period of about 17 months. It is evident that the appellant was somehow trying to run the sick unit which resulted in unintentional default in service tax. In view of the above, it is a fit case for invoking the provisions of Section 80 and setting aside the penalty under Section 78 of the Finance Act. Thus, the penalty under Section 78 is set aside - Decided in favour of assessee.
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2014 (12) TMI 326
Rejection of declarations filed by the applicant under VCES - Section 106(2) - whether the declaration dated 17-7-2013, filed by the declarant, merits to be accepted under the VCES which has been rejected by the designated authority, in terms of legal provisions contained in section 106(2) of the Act - Held that:- both the letters dated 12-2-2013 and 27-2-2013 issued by the jurisdictional Range Officer to the declarant do not attract the provisions of section 106(2)(a)(iii) of the Act, as the relevant provisions/rules covered under Section 106(2)(a)(iii) of the Act have not been incorporated in these letters whereas in the said circular dated 13-5-2013 it has specifically been clarified that No other communication from the department would attract the provisions of Section 106(2)(a)(iii) and thus would not lead to rejection of the declaration. The harmonious reading of subsequent clarification by the CBEC on 8-8-2013 and 25-11-2013 also leads to the conclusion that the declaration are not to be rejected in a routine manner where certain information/documents have been requisitioned from the declarant without specifically quoting the statutory authorities, such as Section 14 of the Central Excise Act, as made applicable to Service Tax vide Section 83 of the Finance Act, Section 72 of Finance Act, Rule 5A of the Service Tax Rules 1994.
In view the objectives of the VCES, which is to encourage disclosure of tax dues and compliance of service tax law by the persons who have not paid service tax dues for the period from Oct. 2007 to Dec. 2012, either on account of ignorance of law or otherwise. I further observe that VCES is the opportunity for such person to pay the tax dues and come clean. Rejection of the declaration merely on the basis of roving enquiries as in the instant case would defeat the purpose of the VCES, hence the impugned order needs to be set-aside to restore the right of the declarant to come clean by paying the tax dues.
Further, after going through the VCES, I find that only the officers notified as designated authority are authorised for the purposes of this scheme. In the case of declarant the Deputy Commissioner, Central Excise Division, Sadashiv Complex, Ambala-Chandigarh Highway, Derabassi has been notified as the designated authority for the purposes of this scheme - The designated authority would allow the declarant to avail the benefit of VCES subject to fulfilment/compliance of other conditions including deposit of 50% tax dues by 31-12-2013. - declarant can amend the declaration by only following the procedure contained in clarification at Sr. No. 10 of the CBEC Circular dated 8-8-2013. The designated authority would consider such amended declaration if any, filed by the declarant in compliance of the VCES - Decided in favour of applicant.
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2014 (12) TMI 325
Discharge of service tax liability by BSNL - Payment to Department of telecommunication (DOT) by the applicant to be treated as payment of service tax or not - Held that:- Payment of DOT has not been accepted by the department as discharge of their Service Tax liability since the amount has not been paid to the Ministry of Finance, Deptt. of Revenue, after the appellant separated from DOT. However, from the orders submitted by the ld. Chartered Accountant, we find that the Commissionerates at Jamshedpur and Ranchi have accepted the payment made to DOT as discharge of their Service Tax liability. Also, we find in similar circumstances this Tribunal has remanded the matter to the adjudicating authority for reconsideration of the payment made to DOT as discharge of liability towards Service Tax. Following the precedent, we remand the matter to the adjudicating authority for reconsideration of all issues afresh - Decided in favour of assessee.
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2014 (12) TMI 289
CENVAT Credit - Business Auxiliary Services - Capital goods - Held that:- Entire goods covered under the invoices have been issued to Head Office have been received in Unit-II. There is also no dispute that each invoice bears an endorsement, that the packed machines were sent to Unit -II. Thus, the conditions prescribed for availment of Cenvat Credit by a factory on the basis of the invoices issued to the Head Office as mentioned in the Board's Circular No.211/45/96/CX dated 14.5.96 are satisfied. The Cenvat Credit demand of ₹ 2,41,060/- along with interest and penalty of equal amount imposed on the appellant is, therefore, not sustainable and is liable to be set aside.
Levy of penalty - Held that:- appellant themselves had presented their records to the Audit Officers in course of which the above mentioned short-payment or non-payment of duty/service tax had been detected, it cannot be said that the above mentioned short-payment/non-payment of duty/service tax was deliberate. In fact the disputed amounts had been paid before the issue of SCN and therefore the same have to be treated as the payment of central excise duty/service tax made under Section 11 A(2B) of the Central Excise Act, 1944/section 73(3) of the Finance Act, 1994 and since the entire disputed amount of duty/service tax has been paid along with interest, even the show cause notice should not have been issued. In view of these circumstances, I hold that imposition of penalty on the appellant was not called for and is liable to be set aside. duty /Cenvat credit/Service Tax demands along with interest are upheld, imposition of penalty is set aside - Decided in favour of assessee.
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2014 (12) TMI 288
Waiver of pre deposit - Manpower recruitment or supply agency services - secondment of employees - Held that:- he salary fixed for the employee is to be paid in both in India as well as in home country of the employee. What has to be paid in the home country of the employee is paid by the appellant to their principal who takes the responsibility of making such payments to the employee in his home country. There is no finding forthcoming anywhere from the records or from the findings that any fee or extra amount has been paid to the principal who has seconded the employee at all.
Decision of AAR IT in the case of Target Corporation India (P.) Ltd. [2012 (8) TMI 466 - AUTHORITY FOR ADVANCE RULINGS] distinguished. - It is quite clear that the decision of AAR IT is not applicable and the facts in this case are similar to the case of M/s. Volkswagen India (Pvt.) Ltd. [2013 (11) TMI 298 - CESTAT MUMBAI]. In both of which favourable view was taken in respect of the assessee, we consider that appellant has made out a prima facie case in respect of these amounts. Appellant has made out a prima facie case for complete waiver of pre-deposit and accordingly, the requirement of pre-deposit of balance dues is waived and stay against recovery is granted for 180 days - Stay granted.
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2014 (12) TMI 287
Waiver of pre depposit - Business Auxiliary Service - Sale/purchase of a used cars - Held that:- When the appellant provided a space to keep the car after cleaning it and also getting it valued and after consulting with the seller, fix price and display for sale and subsequently, when a buyer is found, they would arrange registration and transfer of ownership, etc. There is no doubt that the appellant was rendering service to both of them. When the car is sold, they act as a ‘commission agent’ in selling activity for the seller and act as a ‘commission agent’ for buying activity for buyer. Prima facie, therefore, we find that the appellant may not have a case on merits. - Partial stay granted.
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2014 (12) TMI 286
Condonation of delay - Bar of limitation - Delay in receipt of order - Held that:- It is seen from the impugned order that the order was sent to the appellants as well as their Ld. Advocate, who appeared personal hearing before the Commissioner (Appeals) as well as before this Tribunal. The appellants in their letter dated 15.12.2011, stated that the appellant was informed by their counsel that the Final Order has been passed. Thus, it is clearly evident that the Ld. Counsel had received the impugned order. Section 37C of the 1994 Act read with Rules 13 and 35 of the 1982 Rules clearly indicate that communication of the order to authorized agent of a person is sufficient communication. Thus when the order was passed by the Tribunal in presence of counsel of the appellant, the order shall also be deemed to be communicated on the same date and the submission of the appellant that unless the order is received by the appellant in person, the order shall not be treated to be communicated to the appellant, cannot be accepted.
Revenue placed the evidence in so far as the order was sent to the appellants by speed post, no attempt was made by the appellants to refute this evidence. It is also not disputed the service of order to the Ld. Advocate of the appellant. So, we are unable to accept the contention of the Ld. Advocate that the impugned order was served by letter dated 22.12.2011 of the Superintendent (Appeals). There is a delay in filing of appeal and no COD application has been filed by the appellant for condonation of delay of filing appeals - Decided against assessee.
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2014 (12) TMI 285
Waiver of pre deposit - Site formation and clearance, excavation and earthmoving and demolition service - Penalties under Sections 76, 77 & 78 - Held that:- Contract is either for transportation of minerals or mine to the factory or within the mining area and for hiring tippers, bulldozers, excavators, etc. On going through the contract, we find that in this contract, except for charges for removal of overburden which, in our opinion, is covered by definition of mining service but would not be covered ‘site formation and clearance service’, the other amounts on prima facie basis may not be liable for service tax. appellant has made out prima facie case for waiver of pre-deposit on merits. Accordingly, the requirement of pre-deposit of adjudged dues is waived and stay against recovery is granted during pendency of the appeal - Stay granted.
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2014 (12) TMI 284
Waiver of pre-deposit - cargo handling services - Held that:- Appellant had undertaken to manufacture complete Colour Television in the factory of M/s. Genus Electrotech Ltd. The agreement and the bills which have been raised by the appellant indicate that they were charging them for manufacture of Colour Television production while show cause notice direct them to show cause as to why the said services be not included under the category of cargo handling services. On mere perusal of the definition of cargo handling service as provided in Section 65(23) of Finance Act, 1994, we find that the services rendered by the appellant would not fall under the category of cargo handling services, as it is undisputed that the said services of the appellant were rendered within the factory premises. Prima facie, the services rendered by the appellant will not fall under the category of cargo handling services. appellant has made out a strong prima facie case for waiver of the pre-deposit of the amounts involved. Accordingly, application for waiver of pre-deposit of amounts involved is allowed and recovery thereof stayed till the disposal of appeal. - Stay granted.
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2014 (12) TMI 283
Commercial or industrial construction service - construction of colleges, Government hospitals or open university - Works Contract Service - Notification No. 1/2006-S.T., dated 1-3-2006 - Aabatement of 67% of the gross amount - Held that:- For a construction to be levied to Service Tax, whether under ‘commercial or industrial construction service’ or under ‘works contract service’ the same has to be used for commerce or industry. The construction of colleges, Government hospitals or open university cannot be said to be commercial or industrial in nature. In other words, at the relevant time, the levy did not cover non-commercial or non-industrial construction (other than residential). Therefore, prima facie, there is merit in the contention of the appellant that they are not liable to Service Tax on the amount of ₹ 5,61,69,307/- received by them. If the department has still any doubt, they can call for the copy of the contract and approved plans for the said constructions to satisfy that they are non-commercial or non-industrial in nature, falling outside the purview of service tax levy and the appellant is also directed to submit all the relevant documents in this regard to the department.
The work order issued by Maharashtra State Agricultural Marketing Board also indicates the activity undertaken as construction of market yard, cold storage and so on. These are all civil constructions coming under the category of “commercial or industrial construction service” and not “completion and finishing services” as concluded by the department. If completion and finishing services are undertaken as part of the construction service, then the full service rendered has to be seen as a whole to decide the eligibility to the abatement under Notification No. 1/2006-S.T. - None of the issues germane to the transaction has been examined or considered by the adjudicating authority. Therefore, we set aside the impugned order and remand the case back to the adjudicating authority - Decided in favour of assessee.
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2014 (12) TMI 282
Steamer Agent services - Penalty u/s 78 - Jurisdiction of Adjudicating Authority - Held that:- A jurisdictional objection has to be raised at the earliest opportunity. Such opportunity was available to the appellants when the SCN was served on them. They did not challenge the Additional Collector’s jurisdiction while replying to the SCN, nor did they choose to do so before the adjudicating authority later. They have not raised any jurisdictional objection even in this appeal. The appellants, having submitted to, and acquiesced in the jurisdiction of the departmental authorities, are stopped from challenging it as they did through Counsel at this stage - Following decision of Sangameshwar Pipe and Steel Traders case [2002 (1) TMI 115 - CEGAT, COURT NO. II, NEW DELHI].
Amounts were collected by the appellant from their clients for rendering the services of a ‘steamer agent’. The amounts so collected were to be remitted to various governmental authorities towards statutory levies. However, the appellant had collected huge amounts from their clients far in excess of the statutory levies and retained the excess amounts so collected with them. The statement also reveals that the amounts collected from the clients were far higher than the statutory levies required to be collected; in many cases, the same were a couple of times more than the requirement. In other words, the appellants were collecting amounts charges for the services rendered under the guise of statutory levies and retaining the excess amounts with them on which they did not discharge any service tax liability. Therefore, the demand of service tax on the amounts so collected along with interest thereon under Section 73 read with Section 75 of the Finance Act, 1994, is sustainable in law.
Invocation of extended period of limitation - Held that:- appellant did not disclose the collection of extra amounts to the department either in the statutory returns or otherwise. The facts came to light only when investigation was undertaken and the statement of the Managing Director was recorded in January, 2002 and the show cause notice was issued in March, 2002. As held by the Hon’ble Apex Court in the Nizam Sugar Factory Ltd. [2006 (4) TMI 127 - SUPREME COURT OF INDIA] case, it is the date of knowledge which is relevant for computation of time limit for issue of show cause notice. In the present case, the department came to know of suppression of value only in January, 2002 when the statement of the appellant was recorded and the notice has been issued in March, 2002. Thus the notice has been issued well within time and the plea of time bar fails.
Law as it stood at the relevant time prescribed a minimum penalty equal to the tax sought to be evaded and a maximum penalty of twice the amount of tax. The penalty imposed in the present case is within the limits envisaged under the law. The conduct of the appellant by collecting huge amounts under the guise of statutory levies far in excess of such levies clearly reveals mala fide intention on the part of the appellant. Therefore, imposition of maximum penalty as provided for in the law cannot be faulted. - Decided against assessee.
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2014 (12) TMI 281
Waiver of pre-deposit - Cenvat credit - Inputs used for providing Telecom service - Cenvat credit on (i) transmission towers and parts thereof; and (ii) prefabricated buildings/shelters - Bonafide belief of admissible credit - Held that:- The Circular was issued in the end of February, 2008. Prior to that date, there was correspondence between the department and the appellant. The department asked for particulars of the Cenvat credit availed on towers and parts thereof and also on prefabricated buildings. These particulars were furnished by the party. This happened in January, 2008. There is no material on record to show that the appellant pleaded bona fide belief in their correspondence with the department. As regards ST-3 returns, we agree with the learned counsel that the format of return requires only the amount of Cenvat credit availed by the assessee during the period of return and does not require item-wise break up. However, every return was accompanied by a declaration. The assessee has declared inter alia that they have correctly availed credit in accordance with the provisions of the Finance Act, 1994 and rules thereunder. We have already dealt with those rules and have found that the definition of “input” during the material period was plain and simple. Apparently, it was only after consulting the legal provisions that the assessee in their returns declared as above. This is another factor which contradicts the plea of bona fide belief. - Partial stay granted.
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2014 (12) TMI 247
Denial of refund claim - export of services - claim refund of the service tax paid on various input services under rule 5 of Cenvat Credit Rules, 2004 - Held that:- Services rendered by the appellant, namely, "Business Auxiliary Service" and "Scientific and Technical Consultancy Service" come under Rule 3(i) (iii) of the Export of Service Rules. To qualify as exports, two conditions are required to be satisfied, that is, such services should be provided from India and used outside India and the payments for the service is received in convertible foreign exchange. As regards the receipt of the payment in convertible foreign exchange, there is no dispute. As regards the first condition, when the service provider is located in India and the service recipient is located in abroad, use of the service rendered by the service provider is by the recipient located abroad and therefore, the services can said to be used outside India. Respondent herein undertakes only exports of services and is not rendering any services in India. Therefore, all the input services on which he has taken the credit is in relation to the exports made by him. Consequently the appellant would be eligible for refund of the input service tax paid under Rule 5 of the Cenvat Credit Rules, 2004. - Decided against Revenue.
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2014 (12) TMI 246
Waiver of pre deposit - application for recalling the stay order - earlier entire amount of tax was directed to be deposited - Insurance as well as reinsurance broker - export of service or not - Held that:- High Court had passed the interim order in 2009 insofar as it directed the Revenue for quantification of the dues and there is a temporary stay of the recovery. The matter was adjourned on several occasions and by Note Sheet order dated 2.6.2014, this Bench directed the learned special counsel to verify the latest position before the Hon’ble High Court. We find that the Tribunal in the earlier order, in the applicant’s own case [2008 (11) TMI 82 - CESTAT, CHENNAI], after considering the Board’s circular and the decision of the Hon’ble Supreme Court, on merit, held against the assessee. Period of dispute in the present case is prior to the circular dated 16.4.2010. On a query from the Bench, the learned counsel submits that the demand of tax in the present case is within the normal period of limitation. Hence the applicant failed to make out a strong prima facie case for waiver of predeposit of entire amount of dues. - stay order modified - Partial stay granted.
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2014 (12) TMI 245
Import of services - Technical Testing and Analysis service - Service performed outside India - Design Service - there is no evidence as to why the payment was made in 2008-09 in respect of the service received in 2004-05. There is no evidence on record by way of agreement or copy of order placed or any other correspondence to prove that the service was performed prior to 1-6-2007. In these circumstances, we find no infirmity in the impugned order, whereby the demand with interest and consequent penalty in respect of Design service - No merit in the appeal filed by the assessee.
Taxable service provided from outside India and received in India, shall, in relation to taxable specified in sub-rule (ii) be such services as are performed in India. We find the Technical Testing and Analysis service covered under sub-clause (zzh) of Section 65(105) of the Finance Act, as specified in Rule 3 above. The contention of the assessee is that the entire test was performed outside India. In these circumstances as per the first proviso to Rule 3(ii) for taxable service if it is partly performed in India, it is to be treated as performed in India. We find that there is no allegation in the show cause notice of evidence on record to show that part of the service was performed in India. In view of this we find that as per the provisions of Rule 3 of Import of Service Rules, the Service Tax is not leviable on the Technical testing and analysis. In these circumstances, we find no infirmity in the impugned order whereby the demand in respect of Technical testing and analysis is set aside. - Decided partly in favour of Revenue.
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