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2022 (5) TMI 985 - AT - Service TaxLevy of service tax - scheme of levy under section 66B of Finance Act, 1994 imposed on all ‘services’, as defined in section 65B (44) of Finance Act, 1994, that were either not excluded by section 66D of Finance Act, 1994 (negative list) or not exempted by notification issued under section 93 of Finance Act, 1944 - composite engagement to deliver goods outside the country, for which consideration was received from the recipient of services located outside India - services performed outside the ‘taxable territory’ - Place of Provision of Services Rules - HELD THAT:- It would appear that there is no demand for the pre - ‘negative list’ period and that it was only the inevitable passage of ‘export goods’ through India at commencement of outward journey till loading on ‘foreign going’ vessel/aircraft that was considered to be necessary and sufficient reason for invoking rule 4 of Place of Provision of Service Rules, 2012. In this implied convergence of rule 4 and rule 10 of Place of Provision of Service Rules, 2012, the transaction between M/s ATA Freightline Ltd, New York and M/s ATA Freightline (India) Pvt Ltd was split – as one within India and one thereafter – by appropriating the accountal segregation adopted by the appellant. Place of Provision of Service Rules, 2012 is not a provision for charging of tax; it is limited to determination of location of taxable entity as an adjunct to the charging provision in section 66 B of Finance Act, 1994. The impugned order has not evaluated the impugned activity from that perspective. In the context of identifiable recipient of service located outside the taxable territory, and concomitant absence of ‘goods provided by recipient of service’ as well as the marked absence of recipient of service in the truncated segment of impugned activity and of the goods being put to use for rendering of service, rule 4 of Place of Provision of Service Rules, 2012 is not applicable. That the activity is transportation of goods is the foundation of the proceedings against the appellant, as is evident from the contrived segmentation of stages according to geography and from the unarguable existence of recipient outside India; rule 10 of Place of Provision of Service Rules, 2012 is unambiguously clear about the consequent non-taxability. Appeal allowed - decided in favor of appellant.
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