TMI Blog2017 (1) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... it. Appeal disposed off - decided partly in favor of appellant. - ST/87191/13, ST/87192/13, ST/87194/13 - A/94337-94339/16/SMB - Dated:- 8-12-2016 - Mr. Ramesh Nair, Member (Judicial) Shri. M.P.S. Joshi, Advocate for the Appellants Shri. B Kumar Iyer, Superintendent (A.R.) for the Respondent Order The fact of the case is that the appellant is engaged in exports of IT services. Apart from providing service from India to abroad the branch office of the assessee located in South Africa and United Kingdom also provides services to the overseas client. For this service invoices raised by the branch office and payment there against were also received by the branches. Some part of the said amount was repatriated to India, out of the proceed received by the branches for services provided by overseas branches. The appellant claimed refund under Rule 5 of Cenvat Credit Rules, 2002 in respect of service tax paid on the input service used for export services. The adjudicating authority rejected part of the refund on the ground that turn over of the services provided by the appellant branches located in abroad is not qualified for export turnover of the appellant. Being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices were raised by the respective branches to the foreign based service recipients. The service charges in respect of the service provided by the branches were also received by the branch offices. A part of such receipt was being repatriated to the assessee in India. As per these facts, right from providing the services up to the receipt of the service charges, the overseas branches of the assessees are involved as far as services provided by the branches. In this regard, it is necessary to go through the provisions related to definition of service place of provisions of service, export of service etc. The relevant provisions are reproduced below: SECTION 65B - Interpretations [In this Chapter, unless the context otherwise requires,- (44) service means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely,- (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (ii) such transfer, delivery or supply of any goods which is deemed to be sale within the meaning of clause (29A) of article 36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A person carrying on a business through a branch or agency or representational office in any territory shall be treated as having an establishment in that territory; Place of Provision of Service Rules, 2012 [28/2012-Service Tax dated 20.06.2012] In exercise of the powers conferred by sub-section (1) of section 66C and clause (hhh) of sub-section (2) of section 94 of the Finance Act, 1994 and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue, number 9/2005-ST, dated the 3rd March, 2005 published in the Gazette of India Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 151 (E) dated the 3rd March, 2005 and the notification of the Government of India in the Ministry of Finance, Department of Revenue, number 11/2006-ST dated the 19 th May, 2006 published in the Gazette of India Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 227 (E) dated the 19 th May, 2006, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules for the purpose of determination of the place of provision of services, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itations, as may be specified, by the Central Government, by notification.] As per explanation 3(b) of section 65B (44), if a person is having two establishment one in taxable territory and other in non taxable territory both shall be treated as distinct persons. In the present case the branch office of the assessee is in non taxable territory, therefore the branches are distinct persons. In such case the business turnover of the said branches (distinct persons) can not be treated export turnover of the assessee. In terms of Rule 2(h) definition of 'location of service provider' is applicable only in taxable territory. If the service provider is located in non taxable territory, he will be treated as distinct person and this definition of 'location of Service provider' will not apply. As per Rule 3 of Provisions of Service Rules, 2012 place of service in normal course, shall be location of service recipient. In case location of service receiver is not available, the place of provision shall be the location of the provider of services. In the present case the provision of service is by the branches in South Africa and UK and recipients are also located outside I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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