TMI Blog2023 (4) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Tax R.C. No, AABCC2605FST001. The service of Technical Inspection and Certificate was definitely provided in the country and as such to be treated as service performed in India. At the relevant time there was no condition attached for RCM that the Foreign Service Provider should not have an office in India. Whereas, the appellant relies on the Explanation-1 to Section 66A to drive his point that RCM cannot be made applicable to him as M/s. CSA International, Canada is having its 100% Subsidiary Branch Office operating as M/s. CSA Private Ltd., at Bangalore. Whereas, the revenue relies on sub-section-2 of Section 66A, to fasten the tax liability on the appellant which states that where a person is carrying on a business through a permanent establishment in India and through a permanent establishment other than India, such permanent establishment shall be treated as separate persons. However, the records clearly reveal that the inspection service got performed in India though the certificate was issued by M/s. CSA International, Canada. As M/s. CSA International, Canada has got its 100% Subsidiary in Bangalore, invoking the provisions of Section 66A of the Finance Act and fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Report of the Subsidiary Company in India, the above CSA Certificate was issued to the appellant. The total service charges for issuing the certificate were remitted by the appellant to the holding company in foreign currency. It has been put forth that without various liaison works rendered by 100% subsidiary company in India, M/s. CSA International, Canada could not have completed the service of Technical and Inspection Certification . 2.2 It has been further submitted that the foreign entity had business establishment in India at Bangalore which was accepted by the lower appellate authorities and as there is a relationship of the holding company with 100% Subsidiary Company, the decision of the Hon ble Apex court in the case of State of UP Vs. Renusagar Power Co. AIR 1988 SC 1737 has been relied on. In terms of Taxation of Services (Provided from outside India and received in India) Rules 2006, if service is partially rendered in India is also service performed in India and there is no ground for invocation of larger period as their case could not come under any of the situations described under the proviso to Section 73 of Chapter V of the Finance Act, 1994, as there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant is required to pay service tax under RCM. 4.1 We have heard both sides. The main issue that is to be decided in this appeal is whether the appellant is liable or not for payment of service tax under Section 66A of the Finance Act, 1994 under Reverse Charge Mechanism. For ease of reference, relevant statutory provisions are extracted below:- 66A- Charge of Service Tax on services received from outside India (1) Where any service specified in clause (105) of Section 65 is,- (a) Provided or to be provided by a person who has established a business of has a fixed establishment from which the service is provided or to be provided or has his permanent address or usual place of residence, in a country other than India, and (b) received by a person (hereinafter referred to as the recipient) who has his place of business, fixed establishment, permanent address or usual place of residence in India, such service shall, for the purposes of this section, be the taxable service, and such taxable service shall be treated as if the recipient had himself provided the service in India, and accordingly all the provisions of this Chapter shall apply: Provided that wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... communication through telegraph or telex or a facsimile communication or a leased circuit; (ii) in relation to general insurance business; (iii) in relation to insurance auxiliary service by an insurance agent; and (iv) in relation to transport of goods by road in a goods carriage, where the consignor or consignee of goods is,- .. . (B) any taxable service provided by a person who is a non-resident or is from outside India, does not have any office in India. 2. This notification shall come into force on the first day of January, 2005. [Notification No. 36/2004-ST., dated 31.12.2004] b) Service tax liability when on person other than service providers-Amendment to the above Notification No. 36/2004 -ST dated 31.12.2004 reads as under:- In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 36/2004-Service Tax, dated the 31st December, 2004 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered with Service Tax R.C. No, AABCC2605FST001. 4.3 In terms of Notification No. 36/2004-ST dated 31.12.2004 issued under Section 68 (2) of the Finance Act, 1994, payment of service tax in relation to specified services stated originally that any taxable service provided by a person who is a non-resident or is from outside India does not have any office in India. By amendment Notification No. 25/2005-ST dated 07.06.2005, para (B) was substituted as follows:- (B) any taxable service provided or to be provided by a person, who has established a business or has a fixed establishment from which the service is provided or to be provided, or has his permanent address or usual place of residence, in a country other than India, and such service provider does not have any office in India. This was further amended by Notification No. 9/2006-ST dated 19.04.2006, which reads as under:- (B) any taxable service provided or to be provided from a country other than India and received in India, under Section 66A of the Finance Act, 1994. The main condition that has to be satisfied is the service provider who has established a business from where the service is provided has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But no records were brought forth by M/s. LEDL to show that they had received such services from the Bangalore establishment. All the invoices pertaining to the receipt of services had been duty issued by the service provider viz. M/s. CSA International, Canada, whose establishment (Canadian Establishment) is found in Foreign Country. 21. In terms of second proviso to Section 66A (1) (b), which reads as where the 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 . It is observed that M/s. LEDL is liable to pay the service tax for the services received by them in as much as they had no direct connection with Bangalore establishment (i.e. M/s. CSA India Private Ltd., Bangalore) whereas the direct connection with M/s. CSA International, Canada is quite obvious from records. The lower appellate authority made contrary observations that the Foreign Service provider did not have any office in India. Whereas in his findings, he has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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