TMI Blog2018 (4) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of the Tribunal needs to be followed in order to have certainty in fiscal matters. Impugned order upheld - appeal dismissed - decided against Revenue. - ST/85271/14 - A/85819/2018 - Dated:- 27-3-2018 - SHRI M.V. RAVINDRAN, MEMBER (JUDICIAL) AND SHRI C.J. MATHEW, MEMBER (TECHNICAL) Appearance: Shri Rishi Goel, Additional Commissioner (AR) for Appellant Shri Vipin Jain, Advocate with Shri Ramesh Prabhu, Advocate for Respondent Per: M V Ravindran: This appeal is directed against Order-in-Appeal No. 178/BPS/LTU/MUM/2013 dated 18.10.2013. 2. This matter was listed for hearing on 28.12.2017 and when called out, learned Departmental Representative sought time on the ground that the Authorised Representative who was to argue the matter was on the leave and short adjournment be granted. The Bench directed learned Departmental Representative to argue the matter on 29.12.2017 as it was noticed by the Bench that issue was covered by a decision in respondent s own case in an identical set of facts for the period prior to the period in this appeal. 3. The relevant facts are that the appellants are carrying on various business including exploration and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinental Shelf/Exclusive Economic Zone of India, would continue to remain outside of the scope of levy of the service tax but they had discharged the service tax liability under protest hence this refund claim has been filed. 3.1 However, It appeared that in terms of Serial No. 1 of the Notification No. 14/2010-ST dated 27.02.2010, the provisions of Chapter V of the Finance Act, 1994 has been extended to whole of Continental Shelf and Exclusive Economic Zone (EEZ) of India for the purpose of any services provided to construction of installations, structures and vessels used for prospecting or extraction or production of mineral oil and natural gas and supply thereof. The services provided by foreign services providers to the appellants are in relation to prospecting or extraction of mineral oil/natural gas and the exploration sites of the appellants are located within the Continental Shelf/Exclusive Economic Zones of India. Hence it is an all inclusive notification covering the services provided to the appellants. The amendments made to the Taxation of Services (Provided from outside Indian and received in India) Rules, 2006 (hereinafter called IOS Rules) by defining India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allation, structures and vessels as has been held in the impugned orders. Restrictive meaning assigned and interpreted by the impugned orders is incorrect as it has not taken into consideration the words and phrases which precede and succeed it. While interpreting the extent of India as defined above, the purpose and intention of the legislature for the words for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof has been lost .It is an established fact that for the purposes of prospecting no permanent structure or installation is created or constructed (as has been understood in the impugned orders), seismic survey the very first step for prospecting is not carried out by any Constructed structure. This would essentially lead to a conclusion that the words for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof used in the Rules are otiose. As no prospecting is carried out by a constructed structure (structures etc and construction thereof are meant here, as interpreted in the impugned orders). Hon ble Supreme Court in the case Chowgule Co. Pvt. Ltd. V/s Union of India 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No. 14/2010 has been issued under the powers conferred by clause (a) of the Section (6) of Section 6 and clause (a) of sub-section (7) of section 7 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 whereby the provision of Chapter V of Finance Act 1994, have been extended to the areas as specified in Column 2 in the Continental Shelf Exclusive Economic Zone of India, for the purposes as mentioned in column 3. Thus, Notification No 14 has extended the extent of Chapter V, provisions to include the area as mentioned in Column 2 for the purposes as mentioned Column 3. 2.2 Notification No. 16/2010 has amended the Taxation of Services (Provided from outside India and Received in India ) Rules 2005, so as to substitute Rule 2 (e) in place of India includes the designated areas in the Continental Shelf and Exclusive Economic Zone of India as declared by the notifications of the Government of India in the Ministry of External Affairs numbers S.O. 429(E), dated 18th July, 1986 and S.O. 643 (E), dated the 19 September, 1996, From the above it is abundantly clear that the amendment in the aforesaid rules was done to br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 93 then it has to necessarily mention in the Notification the description of such specified taxable services which it intends to exempt wholly or partially. The findings recorded in the impugned orders and also in Para 9 11 of the order of Tribunal to mean that as the said Rules have been issued under Section 93, then India as defined under the said Rules is giving the effect of an exemption, for the activities of Construction/Pre Construction of Structures, installations and Vessels in the Exclusive Economic Zone. 3.3 Taxation of Services (Provided from outside India and Received in India) Rules 2005, have been issued under Section 93, 94 and 66 A of the Finance Act 1994. Thus, a restrictive meaning to the definition of India by bringing in a fictious exemption by virtue of Rule making under of Section 93 is akin to turning a blind eye to the fact that the Rules have been framed under Section 93 , 94 and Section 66A and not only Section 93. 3.4 FIXED ESTABLISHMENT OF RIL FOR LEVY OF SERVICE TAX AS A RECIPIENT OF SERVICE IN INDIA: Section 661(1) provides that where any service specified in clause (105) of Section 65 is, - a) Provided or to be provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r than India and the company s (service recipient in India) place of business with full style, address and telex /telefax number etc. is shown as M/s. Reliance Industries Limited, 3rd Floor, Maker Chambers IV, 222, Narmian Point, Mumbai-400021 or M/s. Reliance Industries Limited, Building No. 8/A, Ground Floor, Reliance Corporate Park, Ghansolin, Thane- Belapur Road, Navi Mumbai 400 701, India. The above fact candidly proves that services specified in clause (105) of Section 65 of Finance Act, 1994 are received by a per4son who has his place of business, fixed establishment, permanent address or usual place of residence in India. The above referred terms of agreements/contracts satisfy the provisions of sub-section (1) (a) and 1(b) of the Section 66A of the Finance Act, 1994, thereby rendering such services, as discussed supra, chargeable to Service Tax as services received from outside India and to treat the said services as if the recipient in this case RIL had themselves provided the services in India, thereby attracting the provisions of Section 66A of the Finance Act, 1994. Since all their activities are coordinated from their onshore facilities at Kakinada or Mumbai, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose (1) (2) (3) 1. Whole of continental shelf and exclusive economic zone of India Any service provided for all activities pertaining to construction of installations, structures and vessels for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof. 2. The installations, structures and vessels within the continental shelf and the exclusive economic zone of India, constructed for the purposes of prospecting or extraction or production of mineral oil and natural gas Any service provided or to be provided by or to such installations, structures and vessels and for supply of any goods connected with the said activity. Further, on the same day i.e. 27.02.2010, an amendment was also made to the definition of India appearing in Rule 2(e) of the IOS Rules as to include the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Respondent filed its objection to the above SCN, which was not accepted by the Dy. Commissioner who passed an Order-in-Original dated 30.11.2012 rejecting the refund claim. The said order of the Dy. Commissioner was challenged in an appeal by the Respondent before Commissioner (Appeals) who vide his Order-in-Appeal dated 18.10.2013 allowed the Respondents appeal. The Respondent submits that the entire issue is no longer res-integra inasmuch as, this Hon ble Tribunal has, in the Respondent s own case reported in 2016 (41) STR 621 (T), allowed the appeal in its favour in the context of identical refund claims filed for the remaining period between 28.2.2010 till 30.6.2012. The Respondent submits that this Hon ble Tribunal in the Respondent s own case has held that no service tax is payable post 27.02.2010 (upto 30.06.2012) under reverse charge on pre-construction services and for construction services . 6.1 It is his submission that since the issue is squarely covered in the respondent s own case for earlier period, the appeal filed by the Revenue be rejected. 7. In rejoinder of the submission made, learned Departmental Representative submits tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to the Continental Shelf and Exclusive Economic Zone of India (CS and EEZ) by Notification No. 14/2010-S.T., dated 27-22010, which reads as under :- Notification No : 14/2010-S.T., dated 27-2-2010 Extension of provisions of Chapter V of Finance Act, 1994 to Continental Shelf and Exclusive Economic Zone of India - Notification No. 1/2002-S.T. superseded In exercise of the powers conferred by clause (a) of subsection (6) of Section 6 and clause (a) of sub-section (7) of Section 7 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976), and in supersession of the Government of India in the Ministry of Finance (Department of Revenue) Notification No. 1/2002-Service Tax, dated the 1st March, 2002, published in the Gazette of India, Extraordinary, vide number G.S.R. 153(E), dated the 1st March, 2002, except as respects things done or omitted to be done before such supersession, the Central Government hereby extends the provisions of Chapter V of the Finance Act, 1994 (32 of 1994), to the areas specified in column (2) of the Table below, in the continental shelf and exclusive economic zone of India for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mineral oil and natural gas and supply thereof; (B) in Rule 3, - (i) in clause (i), for the word, brackets and letter sub-clauses (d) , the word, brackets and letters subclauses (d), (m) shall be substituted; (ii) in clause (ii), the brackets and letters (m), (s), (t), (u) shall be omitted. 8. The reading of Notification 14/2010-S.T. extended the provisions of the Finance Act to the whole of CS and EEZ for all activities pertaining to construction of installations, structures and vessels for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof. Serial No. 2 of the Notification extends the provisions of installations, structures and vessels within the continental shelf and the exclusive economic zone of India, constructed for the purposes of prospecting or extraction or production of mineral oil and natural gas. Vide the other Notification 16/2010-S.T. which was issued on the same day i.e. 27-2-2010, the definition of India under the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 was amended to provide that India includes the installations, structures and ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of installations, structures and vessels for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof. At serial No. 2, the provisions of the Finance Act were extended to the installations, structures and vessels within the continental shelf and the exclusive economic zone of India, constructed for the purposes of prospecting or extraction or production of mineral oil and natural gas in respect of any service provided or to be provided by or to such installations, structures and vessels and for supply of any goods connected with the said activity. The amendment to the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 by Notification 16/2010-S.T., dated 27-2-2010, clause (e) of Rule 2 of the Rules is substituted. The provisions of clause (e) is reproduced below:- (e) India includes the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction of production of mineral oil and natural gas and supply thereof. The reading of the above amended Notification shows that In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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