2009 (5) TMI 73

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....he service was fully performed outside India. The refund claim has been rejected by the lower authorities and hence the appeal. 2. The short question to be decided is whether service tax is payable by the recipient when the service is performed fully outside India. 3. Shri Khandar Dholakiya, Assistant General Manager - Indirect Taxes, appeared on behalf of the appellants. He submitted that the refund claim has been rejected by the lower authorities on the ground that they are liable for payment of service tax irrespective of the service having been fully performed outside India. According to him service tax liability itself does not arise when the service is not performed in India. The provisions in the rules which provide that when s....

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....ed in India and the value of such taxable service shall be determined under section 67 of the Act and the Rules made thereunder". 5. I am unable to agree with the argument advanced by the lower authorities that the above proviso would mean that if the services are fully performed outside India the provider is liable to pay tax and because of the provisions shifting the liability to the receiver the appellants are liable. The observations of the Commissioner (Appeals) in para 5.6 are reproduced below: "5.6 The appellant's interpretation that the above rule is applicable only to the services which are partly performed in India and, therefore, no service tax is required to be paid by them as services received by them were fully performed....