Appellant prevails in service tax dispute for services to foreign clients

The appellant provided services to Indian and foreign clients, claiming services to foreign clients as 'export of service' exempt from service tax. The Revenue demanded service tax for services to foreign clients, arguing the services were entirely performed in India. The Tribunal found the services were partly performed abroad, granting relief to the appellant based on a previous decision. Regarding the delivery of reports to clients abroad, the Tribunal held that it constituted part performance abroad, upholding the appellant's appeal due to lack of contrary decisions presented.

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Issues:
1. Whether the services provided to foreign clients by the appellant amount to 'export of service' and are exempt from service tax.
2. Whether the delivery of the report to the client located abroad constitutes part performance abroad or is considered entirely performed in India.

Issue 1:
The appellant provided services to Indian and foreign clients, falling under the category of 'Security Agency' service. Service tax was paid for services in India but not for services to foreign clients, claiming it as 'export of service'. Proceedings were initiated for non-payment of service tax for services to foreign clients during 2005-06 to 2009-10, demanding Rs. 61,41,382/- under Section 73(1) of the Finance Act, 1994. Penalties under Sections 76, 77 & 78 were also imposed. The appellant argued that the service was performed partly abroad, citing a Tribunal decision. The Revenue contended that since the entire service was performed in India, it could not be considered as exported. The Tribunal found that the service was partly performed outside India, following the Tribunal's decision in a similar case, granting relief to the appellant.

Issue 2:
The dispute centered around whether the delivery of the report to the client abroad constituted part performance abroad. The Commissioner's order lacked clarity on this aspect, stating that delivering a report outside India did not amount to part performance abroad. The Tribunal noted that the Commissioner did not address where the report was delivered or consider if it constituted part performance abroad. The Tribunal referred to a previous case where delivery of the report abroad was deemed an essential part of the service, and the service was considered partly performed abroad. Since no contrary decision was presented, the Tribunal upheld the appellant's argument, allowing the appeal based on the Tribunal's previous decision.

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