TMI Blog2016 (12) TMI 1395X X X X Extracts X X X X X X X X Extracts X X X X ..... ile business. They have considered the various types of products, their manufacturers, production processes and even the turnover. This activity undertaken is clearly in the nature of market research. Reverse charge mechanism - Held that: - the consultant has carried out market research activity in Europe and for this reason no service tax will be liable to be paid on reverse charge basis. There can be no service tax liability for entering into an agreement, however, the levy arises from relevant activities performed and the classification of such activities are to be decided depending upon which entry specifically covers the activity. The nature of the activity squarely falls to be classified as market research agency - demand of ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de India and received in India) Rules, 2006. In the present appeal, the contention of the appellant is that the activity is to be covered under Market Research Agency for which no service tax will be liable to be paid on reverse charge basis. 2. We have heard Shri Manish Gaur, learned Advocate for the appellant and Ms. Neha Garg, learned DR for the Revenue. 3. The nature of the services received by the appellant is spelt out in clause 3 of the agreement entered into with M/s Gamma Holdings. For ready reference the same is reproduced below :- 3. The nature of the services received by appellant is in laid down in Clause 3 of the Agreement which reads as under: 3.0 Responsibilities of Gamma as a commercial and marketing consult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suggests that the activity undertaken is in the nature of Market Research, the activities underlined on 3.2 and 3.3 of the agreement indicates that such as the activities are classifiable under Management or Business Consultancy Services under Section 65 (105) (r). This service covers any activity directly or indirectly rendered in connection with Management of any organization and even includes Marketing Management. Accordingly, the Adjudicating Authority has adopted this classification. 4. The appellant seeks to bring the classification under Section 65 (105) (y) covered Market Research Agency. Their submission is that the activity is to be classified on the basis of what has been carried out and not on the basis of the agreement alone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reported in 1984 (16) E.L.T. 579 (Tribunal) ; (ii) Global Digital Color Lab vs. CCE, Jaipur I reported in 2016 (42) S.T.R. 746 (Tri. Del.) ; (iii) Artefact Infrastructure Ltd. vs. CCE, Nappur reported in 2016 (42) S.T.R. 34 (Tri. Mumbai) and (iv) Tata Steel Ltd. vs. CST, Mumbai I reported in 2016 (41) S.T.R. 689 (Tri. Mumbai). In line with the above case laws, she submitted that the bonafide belief claimed on the part of the appellant should be on the basis of clear documentary evidence and not on the basis of hallucinatory belief. 6. The nature of the activity undertaken by M/s Gamma for the appellant is to be inferred from the product of such activity available in the form of the report. Such report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tside India and received in India in Rule 3 into three categories :- market research services are specified in Rule 3 (ii) such services will be liable for payment of service tax on reverse charge basis only if such services are performed in India . 8. In the present case, the consultant has carried out such market research activity in Europe and for this reason no service tax will be liable to be paid on reverse charge basis. There can be no service tax liability for entering into an agreement, however, the levy arises from relevant activities performed and the classification of such activities are to be decided depending upon which entry specifically covers the activity. 9. As discussed above, we are of the view that the natu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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