9911796707
TMI Blog2015 (12) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; A show cause notice dated 11.10.2007 was issued to the appellant proposing demand of service tax alongwith interest and to impose penalty, on the ground that the appellant had not paid service tax during the period from 15.03.2005 to 15.06.2005 and wrongly availed exemption under 'Export of Service'. The adjudicating authority confirmed the demand of tax alongwith interest and imposed penalty. By the impugned order, the Commissioner (Appeals) upheld the adjudication order. 2. The learned Advocate for the appellant submits that they are liable to pay tax after the amendment of Rule 3 of Export of Services Rules, 2005 by Notification No. 28/2005-ST dated 07.6.2005, which provides receipt of foreign exchange is required from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that in the present case the service provider viz., the appellant is in India and the service receiver who hands over the consignment is also in India. In such circumstances there is no question of any export of service as held by the assessee. Taking such a view, he confirmed a demand of Rs. 2,97,10,762/- towards the service tax payable for the said period under Section 73 of Finance Act, 1994. Interest under Section 75 of the Finance Act was also demanded. A penalty of Rs. 200/- per day was imposed under Section 76 of Finance Act, 1994 and penalty of Rs. 4,50,00,000/- has been imposed under Section 78 of the Finance Act, 1994. The appellants are highly aggrieved over the impugned order. 3. S/Shri K.S. Ravi Shankar and R. Dakshinamur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service is located outside India at the time when such services are received." From the above Rules, it is clear that if taxable services specified in Sub Rule (2) of Rule 3 are partly performed outside India, such service shall be deemed to have been performed outside India. Courier Agency is one of the services specified in Rule 3(2) as the said service falls under Section 65(105)(f). In the case of international courier service, the consignment obviously has to be delivered abroad. In the light of Rule 3(2) it is to be considered as performed outside India. When the service is performed outside India, there cannot be any Service Tax liability in terms of Rule 4 as such a Service is deemed to be exported. The performance of the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a bona fide understanding of the law. In such a case, there is absolutely no justification for imposing penalty, which is equal to twice the duty involved. We also note that with effect from 15-6-2005, Rule 3(2) of Export Services Rules 2005 has been amended by insertion of 2nd proviso, which reads as follows : "Provided further that for the purposes of this sub-rule, any taxable services provided shall be treated as export of services only if- (a) Such service is delivered outside India and used in business or for any other purpose outside India; and (b) Payment for such service provided is received by the service provider in convertible foreign exchange". In terms of the above Rule with effect from 15-6-2005, the appellant wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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