TaxTMI 
TaxTMI 
2007 (5) TMI 11
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....e appellants, the international consignments during the relevant period were exempted under Rule 4 of Export of Services Rules, 2005. The Commissioner held that in the present case the service provider viz. the appellant is in India and the service receiver who hands over the consignment is also in India. In such circumstances there is no question of any export of service as held by the assessee. Taking such a view, he confirmed a demand of Rs. 2,97,10,762/- towards the service tax payable for the said period under Section 73 of Finance Act, 1994. Interest under Section 75 of the Finance Act was also demanded. A penalty of Rs. 200/- per day was imposed under Section 76 of Finance Act, 1994 and penalty of Rs. 4,50,00,000/- has been imposed u....
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.... taxable services which are provided and used other than in or in relation to commerce or industry, if the recipient of the taxable service is located outside India at the time when such services are received." From the above Rules, it is clear that if taxable services specified in Sub Rule (2) of Rule 3 are partly performed outside India, such service shall be deemed to have been performed outside India. Courier Agency is one of the services specified in Rule 3(2) as the said service falls under Section 65(105)(f). In the case of international courier service, the consignment obviously has to be delivered abroad. In the light of Rule 3(2) it is to be considered as performed outside India. When the service is performed outside India, there....
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....ed a penalty of Rs. 4.5 crores, which is a very savage one, to say the least. The appellant did not discharge the Service Tax liability on a bona fide understanding of the law. In such a case, there is absolutely no justification for imposing penalty, which is equal to twice the duty involved. We also note that with effect from 15-6-2005, Rule 3(2) of Export Services Rules 2005 has been amended by insertion of 2nd proviso, which reads as follows: "Provided further that for the purposes of this sub-rule, any taxable services provided shall be treated as export of services only if- (a) Such service is delivered outside India and used in business or for any other purpose outside India; and (b) Payment for such service provided is received b....