TMI Blog2018 (1) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... ere. In fact, the Underwriting Agreement dated 18-06-2007 makes it clear that the ADS offering is not applicable for sale in India, but only to other select jurisdictions like the United States of America, Canada, Japan etc. - the impugned services availed of by the appellant not having been performed partly or wholly in India, will not bring forth the requirement of taxability on the appellant on reverse charge basis under Rule 66A of the Finance Act, 1994 read with the Taxation of Services (Provided from outside India Received in India) Rules 2006. Appeal allowed - decided in favor of appellant. - ST/40826/2014 - 42262/2017 - Dated:- 25-9-2017 - Smt. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Techni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis thereat. A show-cause notice dated 11.11.2011 was issued to the appellants, inter alia alleging that amount of ₹ 150.83 crores in 2007-08 paid to the foreign entities constituted taxable income of Underwriter's Service, proposing demand of differential service tax liability of around ₹ 18.64 crores along with interest liability thereon and imposition of penalties under various provisions of law. In yet another show-cause notice dated 16.05.2013, for the period 2009-10, on an alleged amount of taxable service of ₹ 66.51 lakhs, service tax liability of ₹ 6.85 crores was similarly proposed to be demanded with interest and imposition of penalties. After due process of adjudication, Commissioner vide impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall, in relation to taxable services of inter alia, Underwriting, be such services as are performed in India; (iv) Ld. Advocate contends that a combined reading of these provisions will mean that in respect of Foreign Underwriter availed by a person in India, the latter will be required to discharge service tax liability thereof only for the services that are performed in India; (v) In support of such a contention Ld. Advocate places reliance on the ratio of the Tribunal decision in Jubilant Life Sciences Ltd. Vs Commissioner of Central Excise, Noida reported in 2013 (29) S.T.R. 529 (Tri. -Del.); and (Vi) He also pleads on the ground of limitation. 4. On the other hand, Ld. Authorised Representative Shri K.P. Muralidh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are partly allowed or wholly performed in India [Emphasis added]. Rule 3 (ii) of the Rules cover a number of services, including Underwriting Services, specified in section 65 (105) (z) of the Finance Act, 1994. The important requirement for such services falling in Rule 3 (ii) are that for attracting service charge liability on reverse charge basis, these services would be such services as are performed in India. Thus, performance of the services in India is paramount to attract tax liability under this sub-rule. In fact, the first proviso to Rule 3 (ii) further clarifies that even wherein one of the specified services is only partly performed in India, it shall be treated as performed in India and the value of the taxable ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (supra), the relevant portion of which is reproduced below: We have considered arguments on both the sides. We are not in agreement with the argument of Revenue that the service of Underwriting has to be necessarily provided by merchant bankers. We also do not agree with the argument that providing Underwriting Service is incidental to the services rendered as a Lead Manager to the issue. This is basically because the latter involves basically organizing an event viz. issue of the FCCBs and the former involves financial risk to the underwriters and the two matters are totally different in nature. We are also not in agreement with the argument that the contract has to be considered as a whole and classified considering it as a singl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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