2019 (4) TMI 438

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....ubmitted by the Appellants on 11 October, 2010. The main ground, amongst others, that was stated was that the firm in Germany, to whom the payments have been made, was not engaged in providing service in relation to certification and there was no evidence on record that the foreign company in Germany had issued any certification that the goods in question maintained the specified standards. This explanation did not find favour of the adjudicating authority and part of the demand, which related to the period after 18 April, 2006, was confirmed. 4. The issue that arises in this appeal is regarding the demand of Service Tax for services provided under Section 65(105)(zzi). The said Section is reproduced below : "Section 65(105(zzi) - "Taxable Service" means any service provided or to be provided to any person, by a technical inspection and certification agency, in relation to technical inspection and certification and the term "service provider" shall be construed accordingly." 5. Section 66 relates to "Charge of Service Tax" and it provides that there shall be levied a tax at the rate of twelve per cent of the value of taxable services referred to in sub-clause (zzi) of Section 6....

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.... : "3. TAXABLE SERVICES PROVIDED FROM OUTSIDE INDIA AND RECEIVED IN INDIA - Subject to section 66A of the Act, the taxable services provided from outside India and received in India shall, in relation to taxable services- (i) specified in sub-clauses (d), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), (zzzh), (zzzr), (zzzy), (zzzz) and (zzzza) of clause (105) of section 65 of the Act, be such services as are provided or to be provided in relation to an immovable property situated in India; (ii) specified in sub-clauses (a), (f), (h),(i), (j), (l), (m), (n), (o), (s), (t), (u), (w), (x), (y), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), (zzzf), and (zzzp) of clause (105) of section 65 of the Act, be such services as are performed in India. Provided that where such taxable service is partly performed in India, it shall be treated as performed in India and the value of such taxable service shall be determined under Section 67 of the Act and the rules made thereunder;" 7. The learned counsel for the Appella....

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....bunal in Total Oil India Ltd. and the relevant portion is as follows : "5. In the present case service of technical testing and analysis is covered under sub-clause (zzh) of Clause 105 of Section 65 of Finance Act, as per sub-clause (ii) of Rule 3 as reproduced above, in case of technical testing and analysis service (zzh) if such service is performed in India even either wholly or partly by the person located outside India then it will be taxable in the hands of the recipient under the reverse charge mechanism. However, in the present case the technical testing and analysis was provided wholly in a country outside India, therefore by virtue of Rule 3 clause (ii) the said service is not liable to Service Tax. This issue has been considered by this Tribunal in the case of Crompton Greaves Ltd. (supra) wherein the Tribunal has passed the following order :- "The appellant are engaged in manufacture of goods falling under Chapter 85 of the Central Excise Tariff Act, 1985. One of the goods used by them is Vacuum Interrupters'. This requires to be tested for performance standards. The appellant sent the Vacuum Interrupters to M/s. Kema High Voltage Laboratories (M/s. KHVL) Netherland....

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.... not justified how the service is performed partly in India. Service according to us is entirely performed out side India. Therefore it cannot be said that the service has been received in India. The service tax is clearly not payable by the appellant in the present case. As tax is not payable, the question of interest and penalties and other fees does not arise. 5. The impugned order is set aside. Appeal is allowed with consequential relief, if any, in accordance with law."" 10. Before we proceed to examine the aforesaid two judgments, it would be appropriate to refer to the relevant provisions already quoted above. Section 65(105) deals with various taxable services and includes (zzi) which defines 'Taxable Service' to mean any service provided to any person by a technical inspection and certification agency, in relation to technical inspection and certification. 'Technical Inspection and Certification' has been defined in Section 65(108) and is as follows: "65(108) "technical inspection and certification" means inspection or examination of goods or process or material or any immovable property to certify that such goods or process or material or immovable property qualifies....