Export of services principle upheld, with service tax under reverse charge held inapplicable on foreign recipient services.

Services rendered in India for and on behalf of a foreign entity, where the effective recipient and consumption are outside India, were treated as export of services. On that settled basis, the Tribunal held that service tax could not be levied under the reverse charge mechanism, and the demand was unsustainable. The earlier decision on identical facts was followed, so the order dropping the tax demand was upheld and the Revenue's challenge failed.

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Issues: Whether the impugned services constituted export of services so as to exclude service tax liability under the reverse charge mechanism.

Analysis: The Tribunal noted that the dispute had already been covered by its earlier decision on identical facts. It accepted the settled view that where services are rendered for a foreign entity and are consumed outside India, the supply is to be treated as export of services. On that basis, service tax could not be fastened on the respondent under the reverse charge mechanism.

Conclusion: The demand of service tax was not sustainable and the order dropping the demand was upheld.

Final Conclusion: The Revenue's challenge failed, and the dismissal of the appeal left the respondent's export-of-service position intact.

Ratio Decidendi: Services performed in India for and on behalf of a foreign entity, where the effective recipient and consumption lie outside India, constitute export of services and do not attract service tax under reverse charge mechanism.

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