TMI Blog2017 (9) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... rse charge mechanism. The service itself is not taxable, whether it is provided prior to 18/04/2006 or thereafter does not make any difference as the service remains non-taxable throughout the relevant period - appeal dismissed - decided against Revenue. - ST/89148/13 - A/88988/17/STB - Dated:- 10-8-2017 - Mr. Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) Shri. B Kumar Iyer, Supdt. (AR) for the appellant Shri. Yogesh Patki, Advocate with Deepak Singh, Advocate for the respondent ORDER Per: Ramesh Nair 1. The fact of the case is that the appellant had entered into a contract with M/s.Schiffko GMBH, Germany, for the activities and scope of work, which was to be performed by them during construction of the Seismic Survey Vessel at Amur Shipbuilding Plant at Russia. The scope of the work was as per the contract which included plan approval, supervision/monitoring during construction of the vessel which was to ensure that Seismic Survey Vessel which was being constructed by Amur Shipbuilding Plant in Russia, met the standards of the Classification Society, viz., GL. However, the appellants paid the service tax on the said service. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate appearing on behalf of the respondent submits that in the present case, the service has been conclusively held classifiable under technical inspection and certification service by the learned Commissioner (Appeals) in para 15 of the impugned order, which is not in challenge by the Revenue. If this is so, then as per Rule 3 (ii) of Taxation of Services (Provided from outside India and received in India) Rules, 2006, it is not taxable under the reverse charge mechanism as in respect of the services of Technical and Inspection-Clause (zzh), if it is partly or wholly performed in India, it is liable to be taxed in India in the hands of the recipient. In the present case, the services of technical and inspection has been provided in Russia by the Germen based company and not a small part of the service was provided in India. Therefore, in terms of rule 3 (ii) of Taxation of Services (Provided from Outside India and received in India) Rules, 2006 service is not taxable. Therefore, even after 18/04/2006 the service is not taxable, since performed outside India. 4. We have carefully considered the submissions made by both the sides. We find that the learned Commissioner (Appeals) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provider of the service has his business establishment both in that country and elsewhere, the country, where the establishment 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 legally constituted.] (3) The provisions of this section shall not apply with effect from such date as the Central Government may, by notification, appoint. 18. Further, Rule 3 of Taxation of services (provided from outside India and received in India) Rules, 2006, introduced vide Notfn.No.11/2006-ST dated 19/04/2006, la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... country other than India and such service is received or to be received by a person who has his place of business, fixed establishment, permanent address or, as the case may be, usual place of residence, in India, such service shall be deemed to be taxable service for the purposes of this clause. By this explanation services provided by a non-resident outside India to a person residing in India has been declared to be taxable service. Therefore, though the services provided to the members of the Petitioners-Association outside India becomes taxable service, the charge of the tax continues to be on the provider of service as per the scheme of the Act, and because of the explanation also the Respondents do not get authority of law to levy a service tax in relation to the services rendered to the vessels and ships of the members of the Petitioners-association outside India. 20. It appears that a similar provision in the rules was made applicable by the Government in relation to the Clearing Agents by making customers of the Clearing Agent liable for levy of the service tax. That question has been decided by the Supreme Court by its judgment in the case of Laghu Udyog Bhara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17) STR J57 (SC) have observed that: The High Court, in the impugned judgement had held that service recipient in India is liable to Service tax for service received from abroad only from 18/04/2006 after enactment of Section 66A of Finance Act, 1994. It held that person providing service alone regarded as an assesee as per Chapter V of Finance Act, 1994 and Rule 2 (1) (d) (iv) of Service Tax Rules, 1994 cannot be framed as not to carry the purpose of the Chapter V ibid. Further, services provided to petitioners outside India became taxable service as per Explanation to Section 65 (105) ibid but charges being on service provider, petitioners being service recipients were not liable. The High Court noted that statutory provision was absent to charge Service tax from recipient before enactment of Section 66A of Finance Act, 1994 . 22. Thus, the above decisions squarely apply to the case on hand and the services rendered by the Contractor to the appellants would be subject to levy of service tax after the introduction of Section 66A of the Finance Act, 1994 4.1 As per the above findings particularly in para 15 it can be seen that the learned Commissioner (Appeals) has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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