TMI Blog2018 (11) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... nly w.e.f. 18.04.2006 i.e. the date of enactment of Section 66A ibid - there is no infirmity in the order passed by the lower authority in dropping the demand for service tax up to 17.04.2006. Service rendered during the period 18.04.2006 to 31.03.2007 - Held that:- Sub-rule 3(i) & 3(ii) does not appear to have any application in relations to services in dispute. But it is required to be examined whether the services rendered by the foreign associates during the period would qualify under sub-rule 3(iii). It needs to be determined whether respondent is the recipient of such services though there is no dispute that such services have been rendered abroad and the payments for such services have been made by the respondent to the foreign se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opped most of the demand in the show cause notice. However, he ordered payment of service tax amounting to ₹ 1,64,542/-. Revenue has challenged the dropping of service tax by the Adjudicating Authority. 2. The grounds of the Revenue was argued by ld. DR, Shri S.Mukhopadhyay. He submitted that the CBEC has issued Circular No.276/8/2009-CX. 8A dated 26.09.2011 in which it has been clarified that prior to the date of enactment of Section 66A of the Finance Act, 1994 w.e.f. 18.04.2006, no liability for payment of service tax on reverse charge mechanism would arise in the light of the decision of the Hon ble Supreme Court in the case of Indian National Shipowners Association [2017(16) SCC 104]. However, he submitted that the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty situated in India. He further submitted that sub-Rule 3(ii) will also not be applicable to the respondent since this refers to services which are performed in India, fully or in part. He emphasized that all the services which are disputed have been rendered by the foreign associates, in overseas areas. Sub-Rule 3(iii) also cannot be made applicable to the respondent, since the services which are in question have not been received by the respondent, who is located in India. Such services have been rendered in connection with the goods which were exported from foreign territories to India. 4. Heard both sides and perused the appeal records. 5. During the disputed period, the respondent entered into agreements with various foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period 18.04.2006 to 31.03.2007. In this connection it will be necessary to consider the provisions of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. This rules were notified by Notification No.11/2006-ST dated 10.04.2006. The relevant portion of the said notification is reproduced below: Taxable services provided from outside India and received in India.- 3. Subject to section 66A of the Act, the taxable services provided from outside India and received in India shall, in relation to taxable services.- (i) Specified in sub-clauses (d), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), [ (zzzh), (zzzr), (zzzy), (zzzz) and (zzzr)] of clause (105) of section 65 of the Act, be such services a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of taxable services specified in clauses (d), (zzzc), and (zzzr) does not relate to immovable property; and (c ) Those specified in clause (ii) of this rule, be such services as are received by a recipient located in India for use in relation to business or commerce; [ Provided that where the taxable service referred to in sub-clause (zzzzj) of clause (105) of section 65 of the Act is received by a recipient located in India, then such taxable service shall be treated as taxable service provided from outside India and received in India subject to the condition that the tangible goods supplied for use are located in India during the period of use of such tangible goods by such recipient.] 8. Various sub-Rules deal wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices in dispute. But it is required to be examined whether the services rendered by the foreign associates during the period would qualify under sub-rule 3(iii). It needs to be determined whether respondent is the recipient of such services though there is no dispute that such services have been rendered abroad and the payments for such services have been made by the respondent to the foreign service providers. 11. In view of the above discussions we are of the view that the matter is required to be remitted back to the adjudicating authority for redetermination of the demand, if any, for the period 18.04.2006 to 31.03.2007. He is directed to examine the services for the above period, with reference to the Taxation of Service Rules, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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