TMI Blog2013 (12) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... ients abroad and, therefore, the consumption of the service is not in India but abroad. Therefore, the question of subjecting the said activity to service tax in India does not appear to be sustainable in law. Appellant has received the service from abroad from their branches, since the service have been consumed by the clients abroad, it would amount to export of service under Rule 3 of the Export Service Rules, 2005 in which case also there would not be any service tax liability. In the case of permanent establishment of the appellant situated abroad, the service has been provided by foreign service providers abroad and the service has also been consumed abroad - matter has to go back to the original adjudicating authority for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls under the category of Business Auxiliary Service' and accordingly, the entire amount received by the overseas branches are liable to service tax. Therefore, a show cause notice dated 24/04/2012 was issued demanding service tax of Rs.17,29,61,546/- on the total receipt of the overseas branches amounting to Rs.1,55,22,06,404/-. 2.2 The appellant had also permanent establishment abroad by way of personnel located in the offices of their various clients abroad. These personnel rendered the service to the overseas clients and for rendering such services, they incurred various expenditure such as rentals, telephone, insurance charges, vehicle charges, postage and courier charges, conference and event management expenses, software AMC and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nance Act, 1994 would not arise at all as there is no payment by the appellant to their branches abroad for rendering of any services. 3.2 For the services rendered abroad they have discharged tax liabilities such as GST/VAT etc. in accordance with the local laws. Therefore, on the same transaction, the authorities in India do not have any jurisdiction to impose any service tax. Similarly, in the case of payments made to service providers in USA for services rendered to the permanent establishment, the said service had been rendered in USA and the tax liability has been discharged thereon. Therefore, there is no jurisdiction vested with the Indian authorities to levy a tax thereon. 3.3 They rely on the decisions of this Tribunal in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a even if such persons may have permanent establishment abroad. In the present case, the appellant has provided services through their branches abroad to customers located abroad. Therefore, it is not a case of the appellant receiving the services but it is a question of rendering services abroad. Further, the appellant has not made any payments for the receipt of any services whereas on the other hand, the appellant has received proceeds of the service rendered abroad by their branches, after deduction of expenditure incurred for rendering of services abroad. Therefore, prima facie, we are of the view that the provisions of Section 66A are not at all attracted. 5.2 Secondly, if the services rendered abroad have been subject to local taxa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, liability to pay service tax under reverse charge mechanism under Section 66A would not arise. Similarly, in the case of IDS Systems Pvt. Ltd. also this Tribunal held that, as regards reimbursement of expenditure relating to employees deputed to USA, the activities have taken place in USA and therefore, liability to service tax would not arise. In the case of Aztescsoft Ltd. also, this Tribunal held that, if the activities have been undertaken in a foreign territory, the question of levying service tax in India would not arise. 6. In view of the above factual and legal position, we are of the considered view that the matter has to go back to the original adjudicating authority for consideration afresh with regard to the question, wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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