TaxTMI 
TaxTMI 
2024 (8) TMI 1337
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....ncy Services' and accordingly has entered into an agreement with M/s Price Water House Coopers at USA, UK and Australia (hereinafter referred to as 'PwC Overseas') for provision of Management Consultancy Services during the period of 31.08.2006 to 31.03.2011. 2.2 During September 2006, the Audit Officials from the Service Tax Department conducted an audit of the service tax records of the appellant. Subsequently, the Department issued various letters to the appellant to ask for details for the period 23.05.2006 to 31.03.2011, which was duly furnished by the appellant. The appellant also informed the Department vide letter dated 14.11.2006 that they have taken registration under the head Management Consultancy Services and therefore, are eligible to exemption under Rule 3(3) of the Export of Service Rules, 2005. On the basis of audit of records conducted by the Department, a show cause notice dated 20.04.2012 was issued to the appellant alleging that: * firstly, the appellant had rendered services in the nature of Market Research and Financial Auditing and has not paid the service tax on such services by claiming exemption under Export of Service Rules 2005 for the period....
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....e submits that the services which are rendered by a Chartered Accountant Firm are as under: 1) Conducting Statutory Audit of books of accounts under Section 224 of Companies Act, 1956 2) Conducting Tax Audits under Section 44AB of Income Tax Act, 1961 3) Conducting Internal Audit of books of accounts under Companies Act, 1956 4) Statutory Certification under Income Tax Act, 1961 5) Maintenance of books of accounts (book-keeping) as per Section 209 of Companies Act, 1956 He also submits that the services rendered by the CA Firm are governed by statutory provisions of Companies Act, 1956 and Income Tax Act, 1961. On the contrary, the services rendered by the appellant are by no stretch of imagination covered under any of the services rendered by a CA Firm. He further submits that the services which are rendered by appellant are as under: a) Providing consultancy or advice, b) Assistance in mergers & acquisition of companies, c) Conducting due diligence under specific situations/transactions, d) Conducting health check or diagnostic reviews, e) Evaluation financial viability of a transaction, amongst others The aforesaid services rendered do not fall under the st....
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....he service can be categorized only under one head which is more specific and which justifies the nature of transaction more closely and keeping that criteria in mind, the services rendered by the appellant are closely taxable under the category of 'Management Consultants Services' because the entire range of services cannot be classified either under CA Services or Market Research Services. 4.6 As regards the services rendered by the appellant which qualify as export of services within the meaning of Export of Service Rules, the learned Consultant submits that as per Export of Service Rules, the following conditions are provided for a service in order to constitute as export: From 31-08-2006 to 28-02-2007 Taxable services which were provided and used by the recipient in or in relation to commerce or industry, such services would be treated as export of services only if a) The recipient of such services was located outside India, b) In case recipient of service has an office/establishment in India, the order for provision of such services should be placed from an office/ establishment outside India, c) The service was delivered outside India and used outside India, and ....
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....fit of cum-tax demand. He further submits that the Department has confirmed the service tax demand of Rs.1,27,90,193/- under the category of CA Services and Market Research Services, but the Department has not segregated the amount of demand pertaining to CA Services and Market Research Services separately. 4.8 As regards, payment of interest, the learned Consultant submits that when the service tax itself is not leviable, therefore, the question of interest does not arise. 4.9 The learned Consultant further submits that the adjudication proceedings in the present case had become barred by limitation in view of Section 73(4B) of the Finance Act, 1994 which inter alia provides that the Central Excise Officer shall determine the amount of duty within six months in case notice has been issued under Section 73(1) and within one year in case of fraud, collusion etc. Whereas, in the present case, the show cause notice was issued on 20.04.2012 and reply to the show cause notice was filed by the appellant on 10.07.2012 and personal hearing was attended by the representative of the appellant on 16.07.2019 and the impugned order was passed by the learned Commissioner on 29.11.2019 i.e. aft....
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....eriod. 5.1 On the other hand, the learned AR for the Revenue reiterated the findings of the impugned order and filed the written submissions. The learned AR submits that the services rendered by the appellant are financial auditing which are classifiable under the category of CA Services as per the provisions of Section 65 of the Finance Act, 1994. 5.2 The learned AR further submits that as per Rule 3(2) of Export of Service Rules, 2005, as amended vide Notification No. 6/2010-ST dated 27.02.2010 sub-clause 2(a), such services provided from India and used outside India had been omitted vide Notification No. 6/2010-ST dated 27.02.2010. He further submits that both the services namely 'Market Research Agency's Services' and 'CA Services' fell under Rule 3(2) of the Export of Service Rules, 2005 and in order to be eligible for exemption, the appellant had to perform the service fully or partly outside India. Whereas, in the present case, the appellant had fully performed the service in India and therefore, they were not eligible for exemption under Export of Service Rules, 2005 and were liable to pay service tax. 5.3 Further, the learned AR has cited a specific case made in the sho....
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....ccounting procedure or the recording, presentation or certification of financial facts or data; or iv. renders such other services as, in the opinion of the Council, are or may be rendered by a chartered accountant in practice; and the words "to be in practice" with their grammatical variations and cognate expressions shall be construed accordingly. 8. Further, we find that in para 11 of the impugned order, the learned Adjudicating Authority has relied upon Section 2(2) of the Chartered Accountants Act, 1949 to conclude that the services of auditing of financial transactions, books of accounts or records etc is covered under the ambit of a practicing chartered accountant. 9. Further, we find that the appellant, which is a Private Limited Company i.e. an Incorporated Company, is not engaged in the practice of Chartered Accountancy and does not function as statutorily required for Practicing Chartered Accountants and the appellant is not permitted to practice as a firm of chartered accountants by the Institute of Chartered Accountants of India. Therefore, the services rendered by the appellant cannot be classified under 'CA Services' by any stretch of imagination. 10. As regards....
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....oreign Companies for a consideration collected in convertible foreign exchange would be qualified for export services under Export of Services Rules, 2005 or otherwise is no more res integra and has been settled by the Hyderabad Bench of the Tribunal in the appellant's own case vide Order No. A/31339-31340/2018 dated 25.10.2018 reported as CCE & ST, Hyderabad-II Vs Price Water House (vice versa) - 2018 (11) TMI 32. The extract of relevant part of the said order is reproduced below: "It is undisputed that the appellant herein rendered services to their overseas network entities as well as to their clients located outside India and the consideration for such services was collected inconvertible foreign currency. The findings of the adjudicating authority is that the services rendered by the appellant are in the form of auditing and accounting of various entities situated in India but had only forwarded the certificate to the foreign entities which is not service rendered outside India; it is also finding that the services are rendered to foreign clients, but performed wholly within India. We find the period during which the appellant had rendered the services is April 2005 to Septe....