TaxTMI 
TaxTMI 
2023 (4) TMI 610
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....s liable for payment of service tax under Section 66A of the Finance Act, 1994 read with Rule 2(1)(d) of the Service Tax Rules, 1994, under Reverse Charge Mechanism (RCM in short), as the person who provided the service is located outside India. Consequently a Show Cause Notice dated 15.06.2012 was issued to the appellant which was duly adjudicated demanding appropriate service tax along with interest and also imposing penalties under Sections 77 and 78 of the Act. The period of dispute is from 01.04.2009 to 31.03.2010. 2.1 Learned Chartered Accountant representing the appellant has argued that M/s. CSA International, Canada, provided the Technical and Inspection service along with its 100% subsidiary M/s. CSA Private Limited, Bangalore, who are also holding service tax registration number. According to them they had no direct contact with M/s. CSA International, Canada and they have approached the Subsidiary Company in India only to get Canadian Standards Association Certificate from M/s. CSA International, Canada. Based on the Technical Inspection of the factory of the appellant and finding Report of the Subsidiary Company in India, the above CSA Certificate was issued to the ap....
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....ur attention to the provisions of Section 68(2) read with 66A of the Finance Act, 1994, in respect of certain categories of service where the service receivers were made liable to pay tax as against the service provider on the amount paid by them to the Foreign Service provider. He has argued that the appellant has not produced any records to show that they had received the services from Bangalore establishment and all the invoices pertaining to the receipt of service were issued by M/s. CSA International, Canada, whose establishment is in a foreign country. A particular reference has been made to the second proviso to Section 66A (1) which reads as under:- "Where the provider of the service has his business establishment both in that country and elsewhere, the country, where the establishment of the provider of service directly concerned with the provision of service is located, shall be treated as the country from which the service is provided or to be provided". He has submitted that as invoices were raised and payment was made directly to M/s. CSA International, Canada, the appellant is required to pay service tax under RCM. 4.1 We have heard both sides. The main issue that....
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....ecified in Section (66N) in such manner and within such period as may be prescribed. (2) Notwithstanding anything contained in sub-section (1), in respect of [such taxable services as may be notified] by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rate specified in section [66B] and all the provisions of this Chapter shall apply to such person as if he is the person liable for paying the service tax in relation to such service:" 4.2 For ease of reference relevant Notification No. 36/2004-S.T dated 31.12.2004 and its subsequent amendments are extracted below for ready reference. a) Service Tax payment in relation to specified services "In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), the Central Government hereby notifies the following taxable services for the purposes of the said subsection, namely:- (A) the services,- (i) in relation to a telephone connection or pager or a communication through telegraph or telex or a facsimile communication or a leased circuit; (ii) in relation to general insurance business....
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....04- Service Tax, dated the 31st December, 2004, G.S.R. 849 (E), dated the 31st December, 2004, namely:- In the said notification, for paragraph (B), the following paragraph shall be substituted, namely:- "(B) any taxable service provided or to be provided from a country other than India and received in India, under Section 66A of the Finance Act, 1994." [Notification No. 9/2006-S.T dated 19.04.2006] A perusal of the provisions of Section 66A of the Finance Act, 1994, reveal that the service recipient is held accountable for payment of service tax when the services are received from a Foreign Service Provider whose usual place of residence or whose permanent address is located other than in India. Explanation-1 to this Section clearly says that a person carrying on a business through a branch or agency in any country shall be treated as having a business establishment in that country. In this appeal, facts clearly indicate that M/s. CSA International, Canada has its 100% Subsidiary viz. M/s. CSA Private Limited, Bangalore, who is registered with Service Tax R.C. No, AABCC2605FST001. 4.3 In terms of Notification No. 36/2004-ST dated 31.12.2004 issued under Section 68 (2) of ....
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....he above facts, we find that the service of Technical Inspection and Certificate was definitely provided in the country and as such to be treated as service performed in India. 4.4 There are contradictory findings in the Order-in-Original dated 12.02.2013 issued by the lower adjudicating authority. The period of dispute in this appeal is from 01.04.2009 to 31.03.2010. The original adjudicating authority in his order, noted at para- 4 mentioned as given below:- "4. In this case, since the person who was providing the service is located outside India and does not have any office in India, the liability to pay service tax under the "Technical Inspection & Certification Service" is on "M/s. LEDL" being the recipient of service." At the same time, in his findings at para-20 and 21, it was mentioned as under:- "20. It may be a fact that the service provider (Canadian Establishment) has an establishment in Bangalore as per extract copy of the Ministry of Corporate Affairs provided by them during the personal hearing. But no records were brought forth by "M/s. LEDL" to show that they had received such services from the Bangalore establishment. All the invoices pertaining to the recei....