Offshore service tax refund upheld where construction-linked levy was held not to extend to disputed foreign services.

Offshore oil and gas services received from foreign providers for pre-construction and construction activities in India's continental shelf and exclusive economic zone were treated as outside the extended service tax levy on the facts presented. The Tribunal followed its earlier coordinate bench ruling in the assessee's own case, holding that Notification No. 14/2010-ST covered only specified activities connected with construction of installations, structures and vessels, and that the amendment to Rule 2(e) of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 did not justify a wider tax reach. Judicial discipline required adherence to the un-stayed earlier view, so the refund claim was admissible.

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Issues: Whether service tax paid under reverse charge on pre-construction and for-construction services received from foreign service providers for offshore oil and gas activities in the continental shelf and exclusive economic zone of India was refundable after the notifications dated 27.02.2010.

Analysis: The Tribunal followed its earlier decision in the assessee's own case involving identical facts for a prior period and held that the levy, as extended by Notification No. 14/2010-ST, operated only in respect of the specified activities connected with construction of installations, structures and vessels, and the amendment to Rule 2(e) of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 did not warrant a broader reading so as to tax the disputed offshore services. The earlier coordinate bench view had not been stayed, and judicial discipline required that it be followed.

Conclusion: The disputed services were not held taxable in the manner contended by the Revenue, and the refund claim remained admissible in favour of the assessee.

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