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M/s Life Care Medical Systems Versus Commissioner of Service Tax, Mumbai-II

2016 (5) TMI 307 - CESTAT MUMBAI

Liability of Service tax - Reverse Charge Mechanism - Business Auxiliary Services - Section 65(19) of the Finance Act, 1994 - Appellant engaged in the business of promoting, marketing, canvassing, procuring orders from various customers in India for the medical equipments manufactured by M/s Viasys International Corporation and also carrying after sales service - Amount received as commission in convertible foreign exchange. - Held that:- the issue is no more res integra as the service is re .....

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he law settled which is supported by judgement of Hon'ble Bombay High Court in the case of CST Vs. SGS India Pvt. Ltd. [2014 (5) TMI 105 - BOMBAY HIGH COURT]. Therefore, the impugned order is unsustainable and liable to be set aside. - Decided in favour of appellant - Appeal No. ST/69/12-Mum - Order No. A/86642/16/STB - Dated:- 3-3-2016 - SHRI M.V. RAVINDRAN, MEMBER (JUDICIAL) AND SHRI C.J. MATHEW, MEMBER (TECHNICAL) For the Petitioner : Shri G. Natarajan, Advocate For the Respondent : Shri S.R. .....

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ing, procuring orders from various customers in India viz. Gujarat, Maharashtra, Madhya Pradesh and Goa for the medical equipments manufactured by M/s Viasys International Corporation; and also carries out after sales services like installation and commissioning, customer care services, warranty services during the warranty period, to the customers located in India in relation to the products of Viasys. It is the case of the Revenue that the appellant, on commission received from overseas compan .....

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held that such an activity is not taxable under Business Auxiliary Services . He would also relied upon the judgement of Hon'ble Bombay High Court in the case of CST Vs. SGS India Pvt. Ltd. - 2014 (34) STR 554 (Bom.) which is more or less on the same issue. 4. Learned Departmental Representative reiterates the findings recorded by the adjudicating authority. 5. On careful consideration of the submissions made by both sides and perusal of the records, we find that there is no dispute that th .....

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es integra as the service is rendered by the appellant on the goods which was manufactured by overseas manufacturer. It would mean the services rendered by the appellant is to an overseas manufacturer on whom Service Tax liability does not arise. The service rendered to such a person situated based at overseas no Service Tax liability arises on him but under reverse charge mechanism appellant is made liable to pay, however in this services are consumed by a person not in India, no Service Tax li .....

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ds in question have been inspected or tested, but the services were of the nature noted by us above, the payment was also made in terms aforesaid, then, the benefit of the notification at page 17 of the paper book was available. That was on the footing that the services rendered were exempt from whole of the liability to pay Service Tax. 22. The circular dated 25th April, 2003 (Annexure A2) is issued on the subject of non-levy of Service Tax on export of services. It has referred to earlier circ .....

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et, that the board clarified that service consumed/provided in India in the manufacture of goods which are ultimately exported, no credit of Service Tax paid can be availed or reimbursed till April, 2003 because inter-sectoral tax credit between service and goods are not allowed. Mr. Sridharan has placed reliance on clause (4) of the circular dated 25th April, 2003. That is where it has been clarified that the question of taxability of secondary services which are used by primary service provide .....

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e principle laid down in the decision of the Honble Supreme Court of India. In this regard, if one refers to the allegations in the show cause cum demand notice, it is apparent that the same refers to the testing charges received by the respondent in convertible foreign currency in respect of services rendered by it in India to its foreign clients. Though the show cause notice refers to the circulars, what is apparent from the judgment of the Honble Supreme Court in the case of All India Feder .....

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ion or contract, Chartered Accountant/Cost Accountant renders professional based services. However, Mr. Sridharan submits if the taxable event is the provision of services, then, the place where the services have been rendered is of significance. The services will be taxable only if they are provided within India. Mr. Sridharan submits that Service Tax is a destination based consumption tax and therefore, it is not applicable on export of services. 24. In the present case, the Tribunal has found .....

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