AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1093
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....ppellant proposing service tax demand of Rs. 4,10,38,988/- and imposition of penalties under the provisions of Finance Act, 1994. While the aforesaid show cause notice was pending adjudication, another show cause notice dated 05.10.2012 for the subsequent period also came to be issued on the same issue by the department proposing to demand of Service tax of Rs. 47,05,066/- along with other proposal for interest and penalties under the Act. After following the due process vide impugned common Order the Learned Commissioner has confirmed the entire demand raised in both the SCNs along with interest and penalty. Aggrieved by the impugned order, the appellant filed the present appeal. 3. Shri Paresh M. Dave, learned counsel appearing for the appellant submits that the invoices are raised by the consignment agents when they sold and supplied the exported goods to buyer like super markets in Europe. After the goods were sold or deemed to have been sold by the Appellant, no one can render any service to the seller of such goods. If the appellant raised invoices in India and therefore the goods were sold or deemed to have sold in India and the title was also transferred in India, itself....
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....yond the border of India. Rule 3 of the Taxation of Service tax Rules 2006 is not attracted in such case. He placed reliance on the following decisions:- • FIRST FLIGHT COURIERS LTD. - 2016 (44) STR 474 • TOTAL OIL INDIA VS. COMM. 2017 (5) GSTL 209 • OIL AND NATURAL GAS 2017 (6) GSTL 537 • CROMPTON GREAVES 2016 (42) STR 306 3.3 He also argued that Section 66A and Rule 3(ii) of Taxation of Services (Provided from Outside India and Received in India) Rules , 2006 are applicable only when any service was received in India, and only then reverse charge mechanism was attracted. It is a settled legal position that service tax could be charged only on the services received in India. Services received and consumed in a foreign country i.e. outside India, are not liable to service tax levy. In the present case all the services of the consignment agents are received and consumed in European countries where the goods exported by the appellant were received by the consignment agent and then sold and supplied to buyers like Super Market; and all the services starting with payment of Custom duty till delivery to the Super Market were thus in....
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.... neutral. 04. Shri Dinesh Prithiani, learned Assistant Commissioner (AR) appearing for the Revenue on the other hand submits that as per the provisions of Section 66A of the Finance Act, 1994, the services received by the Indian entity would be leviable to Service Tax in India on reverse charge basis and, therefore, the demand of Service Tax is sustainable in law. Accordingly, he pleads for upholding the impugned order. 05. We have carefully considered the submissions made by both the sides. The issues to be decided in the present case are as to whether on the services provided by the foreign based consignment agent/ distributor appellant are required to discharge service tax liability in terms of Section 66A of the Finance Act, 1994 as amended from time to time under reverse charge mechanism. We find that Appellant are engaged in exporting of fruits and foreign based consignment agent/ distributer perform various function for Appellant in foreign countries. We have given careful consideration to the submissions which centred around Section 66A of the Finance Act, 1994. This provision of law, which was brought into force w.e.f. 18-4-2006, reads as follows :- SECTION ....
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....utside India and received by a person located in India. Section 66A lays down that such services (specified in clause (105) of Section 65 of the Act) shall be treated as having been provided in India by the recipient. This deeming provision of Section 66A makes the Indian recipient liable to pay service tax on the services provided by the foreign service provider. This exception to the general scheme of levy of service tax is also called 'reverse charge mechanism'. 5.1 The Taxation of Services (Provided from Outside India) Rules, 2006 were made by the Central Government to give effect to the provisions of Section 66A of the Act. Rule 3 of these rules, shorn of inapplicable portions, reads as under :- "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. ... ... ... ii. ... ... ... iii. specified in clause (105) of Section 65 of the Act, but excluding - (a) ... ... ... (b) ... ... ... (c) ... ... ... be such services as are received b....
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....e rephrased - whether, under Section 66A, a recipient, located in India, of a taxable service provided by a person located outside the country can be deemed to have provided the service in India. This fundamental issue was not framed or examined by the adjudicating authority in this case. In our view, the issue requires to be addressed in de novo proceedings. 5.3 It is not in dispute in the present matter that the services provided by Foreign Agents were received by Appellant. The limited case of Appellant is that the services were not received in India. They claim to have received the services outside India. Had they have any office or establishment in said Foreign Countries or elsewhere outside India to receive Foreign Agents services outside India? We are of the view that, for the ends of justice, the appellant should get an opportunity to discharge their burden of proof in fresh proceedings. 5.4 Both sides have relied on case laws on the substantive issue. The learned Commissioner in impugned order has relied on the Hon'ble High Court's decision in Indian National Shipowners' Association case (supra). But, in that case, the question whether the service provided by a perso....