TaxTMI 
TaxTMI 
2017 (12) TMI 1376
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....ng to their liability to pay service tax on reverse charge basis in terms of Section 66 A for the services availed by them from foreign companies under the category of "Banking and Other Finance Services". The appellants through agreements with two foreign companies viz. City Group Global Marketing and U.K. Paints Overseas Ltd., U.K. received services and have paid consideration for such services rendered by these foreign companies. After conduction certain inquiries and verification of the books of accounts of the appellants, the Revenue proceeded against the appellant to demand and recover service tax on such services availed by the appellant in terms of Section 66A. The Original Authority adjudicated the case holding that the appellant i....
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....ppellant received services from the companies situated in UK and the services provided by such companies had no reference to their permanent establishment in India. The permanent establishments of the service providers, if any, in India, have no connection at all with the provision of these services. (B) The presence of permanent establishment of the service provider in India will attract sub-section (2) of Section 66 A, which stipulates that the permanent establishments in India and abroad shall be treated as separate persons for the purpose of the said section. (C) Section 66 A nowhere stipulates that service provider, being a foreign company providing service from an establishment situated outside India to an Indian entity, will not be....
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.... who has his place of business, fixed establishment, permanent address or usual place of residence, in India, such service shall, for the purposes of this section, be taxable service, and such taxable service shall be treated as if the recipient had himself provided the service in India, and accordingly all the provisions of this Chapter shall apply: Provided that where the recipient of the service is an individual and such service received by him is otherwise than for the purpose of use in any business or commerce, the provisions of this sub-section shall not apply: Provided further that where the provider of the service has his business establishment both in that country and elsewhere, the country, where the establishment of the provide....
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....ovider. In other words, the permanent establishment of the service provider in India has no role or connection with the provisions of service. In such situation, we note that on a clear fact that the appellants received service provided by a legal entity separately recognized and established in a foreign country, this is a case covered under Section 66 A. Accordingly, we hold that the appellants are liable to pay service tax on reverse charge basis w.e.f. 18.04.2006. 8. The appellants contested the demand on limitation as well as for imposition of penalty. We note that the appellants are registered with the Department for provision of taxable services and also availed service as per the agreements with the foreign companies. Their claim is....