TMI Blog2017 (6) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... dran, Member (Judicial) And Shri C J Mathew, Member (Technical) Shri Bharat Raichandani, Advocate for the appellant Shri D. Nagvenkar, Additional Commissioner (AR) ORDER Per: C J Mathew The appellant, M/s Jewelex India Private Ltd, is in the business of cutting and polishing diamonds for which 'rough diamonds' are imported. As 'sight holder' of M/s Diamond Trading Company (DTC), the appellant participates in their 'sight' sales through contractually mandated broker who, in their case, is M/s I Henning, London. The broker is paid commission in foreign currency by the appellant in accordance with the agreement entered into with the broker. The commission paid to the broker, according to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicate, non-consideration of the submissions made, geographical limitation on levy of tax, nonconformity with the clarification issued by Central Board of Excise Customs, the non-applicability of the taxable services under which the levy has been confirmed and the bar of limitation. Before considering all these issues, it is necessary for us to examine the core the appeal: the scope of coverage of the transaction within the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. We have heard both Learned Counsel for appellant and Learned Authorised Representative exhaustively canvas their respective positions on this aspect. 5. For a proper ascertainment of the nature of the service transaction, it is ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of 1% of the purchase price of rough diamonds, purchased from DTC. These are appropriately covered under the definition of BAS. Notice he has not challenged the classification proposed by the Department in the impugned SCNs. I therefore hold that the said services are classifiable under BAS. 7. Having thus disposed off the classification of the activities, the impugned order proceeds to find that the said services are covered by the third category in the Rules which, would render the appellant liable to tax owing to the location of the recipient. Other submissions made by the appellant have also been summarily dismissed. 8. The statutory foundation for levy of tax on services rendered from outside India is found in section 66A o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hment of the provider of service directly concerned with the provision of service is located, shall be treated as the country from which the service is provided or to be provided. (2) Where a person is carrying on a business through a permanent establishment in India and through another permanent establishment in a country other than India, such permanent establishments shall be treated as separate persons for the purposes of this section. Explanation 1. - A person carrying on a business through a branch or agency in any country shall be treated as having a business establishment in that country. Explanation 2. -Usual place of residence, in relation to a body corporate, means the place where it is incorporated or otherwise le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and confirmed in the impugned order. 10. It would appear from the impugned order that there has been no such determination of the nature of service and the coverage of the transaction between the overseas entities and the appellant within the framework of the Rules. To that extent the impugned order is not sustainable in law. 11. It is necessary that the show cause notice be determined afresh in accordance with the various decisions that have emanated from different judicial fora, including the Tribunal, for according legality and propriety to any demand of tax that may arise therefrom. In order to complete this process, we set aside the impugned order and remand the matter back to the original authority for reconsideration. (Pron ..... X X X X Extracts X X X X X X X X Extracts X X X X
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