Imported testing and certification services may fall outside service tax where received in India for business use; stay granted.

Technical inspection and certification services obtained from abroad, involving testing in IEC-accredited laboratories outside India and receipt of reports in India, were considered prima facie to fall within the exclusion for services received in India for use in relation to business or commerce under the Taxation of Services (Provided from Outside India) Rules, 2006. On that basis, the Tribunal treated service tax liability as doubtful at the interim stage and granted relief against coercive collection. Pre-deposit was waived and recovery was stayed pending the appeal.

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Issues: Whether service tax was prima facie payable on technical inspection and certification services received from abroad and whether pre-deposit and recovery should be stayed during the pendency of the appeal.

Analysis: The disputed service consisted of testing of the appellant's goods in IEC-accredited laboratories outside India and receipt of the test reports in India. The applicable provisions under Rule 3 of the Taxation of Services (Provided from Outside India) Rules, 2006 distinguish between services performed in India and services received in India for use in relation to business or commerce. On the material available, there was no finding that the service was not used for business or commerce, and the exclusion under Rule 3(iii) was considered relevant. The Tribunal, therefore, formed a prima facie view that service tax may not be payable.

Conclusion: Pre-deposit was waived and recovery was stayed during the pendency of the appeal.

Ratio Decidendi: Where a service received from abroad is prima facie covered by the exclusion for services received in India for use in relation to business or commerce, pre-deposit and recovery may be stayed pending appeal.

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