TaxTMI 
TaxTMI 
2023 (3) TMI 15
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....e period 2006-07 to 2008-09. They had not discharged service tax on the amounts received for carrying out repair works for the reason that the services have been provided in the non-designated areas and therefore the provisions of Chapter V of the Finance Act, 1994 do not apply. Show cause notice was issued proposing to demand service tax on such amounts received by them, along with interest and also for imposing penalty. After due process of law, the original authority confirmed the demand along with interest and imposed penalty. Hence this appeal. 2. Ld. Counsel Ms. Radhika Chandrasekar and Ms. P. Saravana Selvi appeared and argued for the appellant. 3. The Ld. Counsel submitted that the services were rendered as per the work orders placed by M/s.BST Management Services Ltd., Chennai and M/s.Western India Shipyard Ltd., Goa. The appellant had carried out these services in a non-designated area. Since the provisions of Chapter V of the Finance Act, 1994 were extended only in designated area in the continental shelf and exclusive economic zone of India vide Notification No.1/2002 dated 01.03.2002, the appellant is not liable to pay the service tax. The Department has demanded ser....
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....ional in nature, the extended period cannot be invoked. She prayed that the appeal may be allowed. 6. Ld. A.R appeared for the Department and supported the findings in the impugned order. He submitted that since the repair works have been done by one Indian company to another Indian company and the amounts having been received in Indian currency the activity will not fall under the 'export of services' and the appellant is liable to pay service tax. 7. Heard both sides. 8. The demand is raised on the consideration received for repair works done by the appellant on the rig / drill ship. The Department has proceeded to analyse whether the activity would fall under export of services or not. The defence taken by the appellant is that the services were rendered in a non-designated area and therefore they are not liable to service tax . Notification No.1/2002-ST dated 1.3.2002 reads as under : "Service Tax - Extension of provisions of Chapter V of the Finance Act (32 of 1994) to the designated areas in the continental shelf and exclusive economic zone of India In exercise of the powers conferred by clause (a) of sub-section (6) of section 6, and clause (a) of sub-section (7) of s....
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.... the present appeal, the appellant has also not disputed that the services in question are covered by "Supply of Tangible Goods for use" as has been defined under Section 65(105)(zzzzj) of Chapter V of the Finance Act, 1994 (hereinafter referred to as "the said Act"). It is also not in dispute that the appellant has discharged the Service Tax liability in respect of services rendered by it to the installations, structures and vessels in the Continental Shelf of India and Exclusive Economic Zone of India for the period between 7-7-2009 and 27-2-2010. The only dispute is as to whether during the aforesaid period, the appellant was also liable to pay the Service Tax on the services rendered by these vessels for the purpose of prospecting mineral oil and as such for the services consumed by Continental Shelf of India or Exclusive Economic Zone of India. The recipient of the service, ONGC, had also informed the appellant about the non-applicability of Service Tax on drilling work undertaken in open locations except the service provided to installations, structures and vessels in the Continental Shelf and Exclusive Economic Zone of India for the period between 7-7-2009 to 27-2-2010. ......
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.... that the demand for tax against the appellant was not justified, we do not find it necessary to go into the said question. 45. Appeal is, accordingly, allowed in terms of prayer clause (b). However, in the facts and circumstances, no order as to costs." 11. The territorial application of the service tax and the commencement of its application from 01.07.1994 and the change brought forth in the application w.e.f. 07.07.2009 has been discussed in the case of Reliance Industries Vs Commissioner of Service Tax, LTU Mumbai - 2013-TIOL-1900 CESTAT-MUM. The relevant para of the said decision is reproduced as under : "3. The contention of the appellants is that during the relevant period, the pre-construction and for construction services in respect of which refund has been claimed were provided and consumed in such areas of CS & EEZ to which the provisions of the Finance Act 1994 had either not been extended, or if extended, were exempted under the IOS Rules 2006. The Lower Authorities have failed to take note of the fact that till 01.07.2012, the Service Tax Legislation did not apply to the entire CS and EEZ of India, but to only some parts thereof and that it was only with effect ....