Service performed wholly outside India was not an import of service, so reverse charge demand lacked prima facie basis.

Exhibition services performed wholly outside India were held not to constitute an import of service for reverse charge purposes under Rule 3(ii) of the Taxation of Services (Provided from Outside India) Rules, 2006, because the rule applies only where the service is performed in India or partly in India. On that basis, no prima facie service tax liability was made out on the alleged import of service, and the appellant obtained waiver of pre-deposit and stay of recovery pending appeal.

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Issues: Whether the service tax demand on exhibition service was sustainable when the exhibitions were held abroad and the service was alleged to be an import of service liable under reverse charge mechanism.

Analysis: The order records that the exhibitions were held outside India, so the service was rendered abroad. Under Rule 3(ii) of the Taxation of Services (Provided from Outside India) Rules, 2006, a service is treated as an import of service only if it is performed in India or at least partly performed in India. On that basis, the order holds that no import of service was made out and the appellant had a prima facie case against the demand.

Conclusion: The demand was not made out at the interim stage and the appellant was granted waiver of pre-deposit and stay of recovery.

Final Conclusion: Interim protection was granted to the appellant, and recovery of the impugned liability remained stayed during the pendency of the appeal.

Ratio Decidendi: A service performed wholly outside India is not treated as an import of service for reverse charge purposes under Rule 3(ii) of the Taxation of Services (Provided from Outside India) Rules, 2006.

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