TaxTMI 
TaxTMI 
2016 (12) TMI 34
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....client. Appellant avails CENVAT credit on inputs/input services as per CENVAT Credit Rules, 2004 but, being an exporting unit, is unable to utilize the accumulated CENVAT credit. Refund of the accumulated credit is claimed under rule 5 of CENVAT Credit Rules, 2004. 3. M/s Advinus Therapeutics Pvt Ltd had filed six refund claims, viz, of Rs. 74,73,004 for October-December 2012, of Rs. 39,08013 for January-March 2013, of Rs. 65,60,407 for April-June 2013 and July September 2013, of Rs. 45,38,039 for October-December 2013 and of Rs. 49,21,338 for January-March 2014. Original authority sanctioned the second claim in full and disallowed only Rs. 3119 in the first claim while rejecting the other four in three Orders-in-Original. M/s Advinus Therapeutics Pvt Ltd disputed the three rejection orders before the first appellate authority and Commissioner of Central Excise, Pune-l directed the original authority to challenge the sanction of the other two claims. The first appellate authority rejected the appeals filed by Revenue and allowed the appeals filed by M/s Advinus Therapeutics Pvt Ltd leading to the present dispute before us. 4. It has been noted by the first appellate authority tha....
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....ice Tax, Mumbai [2011 (24) STR 60 (Tri-Mumbai)] which found approval of Hon'ble High Court of Bombay. 7. We find that, in view of the contentions put forth by Learned Authorized Representative for not acknowledging the applicability of the decision supra, we are called upon to elaborate the principle so espoused and the applicability therein. 8. The Place of Provision of Service Rules, 2012 was notified owing to the altered circumstances of incorporation of section 66B as substitute for section 66 of Finance Act, 1994 with effect from 1st June 2012; consequently, the taxability of service was, thenceforth, not amenable to identification from the transaction defined in various sub-clauses of section 65 (105) of Finance Act, 1994. With the coming into force of 'taxable territory' as one of the determinants of taxability, section 66C, viz., '66B. Determination of place of provision of service (1) The Central Government may, having regard to the nature and description of various services, by rules made in this regard, determine the place where such service is provided or deemed to have been provided or agreed to be provided or deemed to have been agreed to be provid....
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....t the following ingredients which crystallize an activity as export of service' for the purposes of rule 6A of Service Tax Rules, 1994, viz., that provider of service is in taxable territory, that recipient is outside India, that the service is not in the 'negative list', that payment is received in convertible foreign exchange and that the provider and recipient are not covered by the fiction in Explanation 2(b) of section 65B(44) of Finance Act, 1994, are applicable to the service rendered by the respondent is common ground. The cavil is that the activity does conform to the provisions of rule 4 of Place of Provision of Service, 2012 because the service is allegedly '4.....provided in respect to goods that are required to be made physically available by the recipient of service to the provider of service, or to a person acting on behalf of the provider of service, in order to provide the service. .' rendering the location of performance of service, i.e. India, to be pertinent to the activity of respondent. 12. It is an admitted fact that the respondent had been rendering services that were, in the erstwhile pre-negative list regime, taxable but for the provider....
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....at is stated above, it is clear that Service Tax is a VAT which in turn is destination based consumption tax in the sense that it is on commercial activities and is not a charge on the business but on the consumer and it would, logically, be leviable on services provided within the country.' It would appear from the exposition in the judgment that the tax was intended as a levy on activities that would otherwise be performed by the recipient for itself. The new industry of hiving out or outsourcing of what was, conceivably, being done within the enterprise was intended to be subject to the new levy. In the matter of service rendered by respondent, this activity could, but for commercial viability, well be executed by the recipient within its own organization or the territory in which it exists. The satisfaction of the customer occurs upon an outcome which is possessed by the recipient. Hence, even if some of the activities are carried out in India, by no stretch can it be asserted that the fulfillment of the activity is in India. Therefore, the inescapable conclusion is that the location of the actual performance of the service is outside India and, even with the special and speci....
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....t, rule 3 would have sufficed. A contingency that is not amenable to rule 3 has been foreseen and remedied by rule 4. And in the process, the sovereign jurisdiction to tax is asseted. It is, therefore, not by the specific word or phrase in rule 4(1) of Place of Provision of Services Rules, 2012 that the taxability is to be determined but from the mischief effect intended to be plugged. It is obviously not intended to tax any activity rendered on goods as to alter its form because that would be covered by excise on manufacture or be afforded privileges available to merchandise trade. The provision itself excludes goods imported temporarily for repairs but that does not, ipso facto, exempt goods imported temporarily for repairs from taxability which would, by default, be predicated by the intent in rule 3. Consequently, a recipient in India would be liable to tax on such temporary imports for repairs while service to a recipient located abroad would not be taxable. This is in consonance with the privilege of exemption afforded to export of services. The special and distinct role of rule 4 becomes clearer. 16. Not intended to tax the activity of altering goods supplied by the recipie....