2014 (5) TMI 1070

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....d services under the category of "Maintenance and Repair Services" and "Installation and Commissioning Services" to different customers in the State of Bihar as well as to the customers in Nepal. Service tax demand has been confirmed against the applicant on the ground that for the services rendered in Nepal, they had received the payment in Indian currency and not in convertible foreign exchange, and failed to discharge service tax on the same. Accordingly, they violated Section 68 of the Finance Act, 1994 and Rule 6 of the Service Tax Rules, 1994 read with Rule 3(2) of Export of Services Rules, 2005. 2.1 Assailing the order, ld. advocate has advanced a two fold argument; firstly, the services were rendered in Nepal i.e. outside th....

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....sent case, inasmuch as, the Hon'ble Tribunal, in that case has not examined the applicability of Rule 3 of the Export of Services Rules, 2005, but kept the said issue open. He has also referred to the Board's Circular No. 111/5/2009-S.T., dated 24-2-2009, wherein it is clarified that a service provider providing services viz. event management service, in U. K., it is to be treated as services provided outside India and fall under the Export of Services Rules, 2005. 4. Heard both sides and perused the records. We find that the demand has been confirmed against the applicant on the ground that even though they had rendered services falling under the category of "Maintenance and Repair Services" and "Installation and Commissioning Serv....

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....nd also the authorities below had categorically held that the Nepali currency is not a convertible foreign exchange. The case laws cited by the ld. advocate is not applicable, inasmuch as, their Lordships in that case has not decided the issue whether Rule 3 of the Export of Services Rules, 2005, be applicable to the facts of that case. For better appreciation, the relevant portion of the said Rules is reproduced below : "Rule 3. Export of taxable service. - (1) Export of taxable services shall, in relation to taxable services,- (ii) specified in sub-clauses (a) (f)............................... ........................................................................... ......................................