2016 (12) TMI 1395

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pellants are manufacturers of automotive laminated fabrics. They entered into an agreement with M/s Gamma Holdings N.V. Netherlands. The Commissioner took the view that the activities undertaken by the service provider abroad would fall under the category of Management or Business Consultant Services defined in Section 65 (105) (r) of the Finance Act, 1994. Further, since the appellant has received such services in India, they were held liable for payment of service tax on such amount under Section 66A on reverse charge basis. In the impugned order, the Adjudicating Authority ruled out the alternate classification of the activity under Section 65 (105) (y) of the Finance Act, 1994 which covered Market Research Agency. The latter classificat....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ducts currently under the portfolio of Gamma". It is pertinent to note that the agreement categorized the foreign service provider as commercial and marketing consultant . From the records we find that M/s Gamma Holdings has submitted only one feasibility report as a consequence to this agreement. The feasibility report is titled Mark Research EU Mark for Technical Textiles . The contracted amount of EURO 9,50,000/- stands paid vide two invoices dated 31/01/2007 as well as 31/01/2008. The invoices have been issued with the description : "commercial and marketing consultancy services 1st installment 1 January 2007 (agreement 20th December 2006) The Revenue s view is that M/s Gamma has been appointed as a commercial and marketi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f these rules issued under Section 66A, no service tax is payable by the appellant on reverse charge basis. They have made further plea of limitation with the submission that the services, in question, are in the nature of Market Research and, hence, not taxable in India. The issue of reverse charge mechanism also stands settled only by the decision of the Hon'ble Bombay High Court in the case of Indian National Shipowners Association vs. Union of India reported in 2009 (13) S.T.R. 235 (Bom.). 5. The learned AR, on the other hand, reiterated the view taken by the Original Adjudicating Authority that service tax is liable under the category of Management or Business Consultancy. She further vehemently opposed the plea of limitation rai....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....etc. Such activities do not appear to have been rendered. From the invoices produced, we find that the entire consideration agreed between the parties have already been paid to the consultant, i.e. the full amount of EURO 9,00,000/- has already been paid. Revenue also has not come up with any other documentary evidence to suggest that the appellant has received from the foreign consultant any services other than the market research report which is on record. We are of the view that the activity rendered by the consultant needs to be classified on the basis of the documents evidencing the activity. The activity clearly is specifically covered under the category of market research service classifiable under Section 65 (105) (y). 7. The Tax....