AI Drafter 
TaxTMI 
TaxTMI 
2025 (3) TMI 386
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....n-Original Nos.28 to 30 / 2020-ADC (dated 30.09.2020) Rs.2,17,21,291/- (Service Tax and Cesses Payable together with Penalty) October 2012 to September 2014 October 2014 to March 2016 April 2016 to June 2017 2 14460 of 2021 Order-in-Original Nos.02-05/2021 (R) Rs. 37,88,251/- (Rejection of Refund Claim) July 2012 to September 2015 2. The Order-in-Original Nos.28-30/2020-ADC dated 30.09.2020 impugned in W.P.No.5886 of 2021 is preceded by a Show Cause Notice and two Statement of Demands issued to the Petitioner for the period in the following Table as detailed below:- Table-2 Sl. No. Dated SCN No. SOD No. 1 22.04.2015 40/2015-C (ST-II) - 2 21.04.2017 - 10/2017 3 09.10.2018 - 32/2018 (ADC) 3. Operative portion of the Order-in-Original Nos.28-30/2020-ADC dated 30.09.2020 impugned in W.P.No.5886 of 2021 reads as under:- "18. In view of the above discussions, I pass the following order:- ORDER I. Show cause Notice No. No.40/2015 dated 22.04.2015:- (a) I confirm the demand of Rs. 76,72,245/- (Rupees Seventy Six Lakhs Seventy Two Thousand Two hundred and Forty five only) being ....
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.... (Rupees Five Lakhs Fourteen Thousand Seven Hundred and Twenty Two Only) under Section 76 of the Finance Act 1994. M/s HYPERTHEM shall however have the option to pay an amount equal to 25% of this amount provided that they pay the entire service tax demanded at III(a) above along with interest at applicable rate demanded at III(b) above including the 25% of the penal amount within thirty days from the date of receipt of this order." 4. By the aforesaid Order, the Additional Commissioner has confirmed a demand of service tax on the services provided by the Petitioner to its Group Company, namely, M/s.Hypertherm (S) Pte. Ltd., Singapore. 5. In W.P.No.14460 of 2021, the Petitioner has challenged the Impugned Order-in-Original Nos.02-05/2021 dated 11.05.2021 passed by the 2nd respondent namely the Additional Commissioner. 6. By the Impugned Order, the 2nd respondent namely the Additional Commissioner has rejected the refund of input tax credit (CENVAT Credit) claimed by the Petitioner on the ground that there was no export of service as per the Place of Provision of Services Rules, 2012. 7. Operative portion of the Order-in-Original Nos.02-05/2021 dated 11.05.2021 impugned ....
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....g services to its subsidiary namely M/s.Hypertherm (S) Pte. Ltd., Singapore viz., i. Market research; ii. Product training for group's Indian customers; iii. Marketing services; iv. Develop business plans with group's Indian customers and identification of prospective customers. 10. Therefore, the Petitioner assumed that since the above services were being exported to its subsidiary namely M/s.Hypertherm (S) Pte. Ltd., Singapore, the Petitioner was not liable to pay service tax under the provisions of the Finance Act, 1944. 11. Under these circumstances, the Petitioner did not pay service tax for the services provided to the aforesaid Company under the provisions of the Finance Act, 1994 for the period between October 2012 and September 2015. 12. Under these circumstances, the Petitioner also filed a claim for refund of Input Tax Credit (CENVAT Credit) under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No.27/2012-CE (N.T.) dated 18.06.2012. 13. The refund claims were sought to be denied by issuance of Show Cause Notices. Similarly, Show Cause Notice / Statements of Demand were issued to the Petitioner as deta....
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....Provision of Services Rules, 2012. 20. That apart, the learned counsel for the Petitioner would also submit that the basis on which proceedings were initiated and were confirmed in the Impugned Orders were in variance, inasmuch as the Show Cause Notices were issued and were predicated on Rule 4 of the Place of Provision of Services Rules, 2012, whereas the Impugned Orders rejecting the refunds claimed by referring to Rule 6 of the Place of Provision of Services Rules, 2012 which in any event inapplicable. 21. In support of the above contention, Learned counsel for the Petitioner would place reliance on the ratio of the Hon'ble Supreme Court in Commissioner of Central Excise, Nagpur Vs. Ballarpur Industries Limited, (2007) 8 SCC 89. 22. On merits, the learned counsel for the Petitioner would submit that there are plethora of decisions of the Tribunal and also the decisions of the other Courts, where the issue now stands concluded in favour of the Petitioner. The learned counsel for the Petitioner on the following cases:- i. Commissioner of Service Tax, Mumbai-II Vs. SGS India Pvt. Ltd. 2014 (34) S.T.R. 554 (Bom.) ii. Commissioner of Service Tax, Mumbai....
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.... each other. 28. The learned Senior Standing Counsel for the Respondents would further submit that if Rule 3 of the Place of Provision of Services Rules, 2012 is interpreted to mean that the place of service is always the location of the service receiver, regardless of any circumstance, then Rule 6A(1)(d) of the Service Tax Rules, 2012 would be rendered redundant and otiose. Therefore, it is submitted that even if the recipient of service is outside India, the service cannot be considered an export of service if it is performed within India. 29. It is also submitted by the Learned Senior Standing Counsel for the Respondents that in this case, the Petitioner had explored new markets and prospective potential buyers for products of M/s.Hypertherm, Singapore by participating in exhibitions / tradeshows / trade fairs in different parts of India. 30. It is further submitted by the Learned Senior Standing Counsel for the Respondents that the Petitioner in their replies dated 26.11.2018 and 15.05.2019, have also admitted the 'exhibition' of products of M/s.Hypertherm, Singapore in such events in India. Thus, it is clear that the service provided by the Petitioner is perfo....
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....under:- "6A. Export of Services (1) The provision of any service provided or agreed to be provided shall be treated as export of service when,- (a) the provider of service is located in the taxable territory, (b) the recipient of service is located outside India, (c) the service is not a service specified in the Section 66D of the Act, (d) the place of provision of the service is outside India, (e) the payment for such service has been received by the provider of service in convertible foreign exchange, and (f) the provider of service and recipient of service are not merely establishments of a distinct person in accordance with item (b) of Explanation 2 of clause (44) of Section 65B of the Act. (2) Where any service is exported, the Central Government may, by notification, grant rebate of service tax or duty paid on input services or inputs, as the case may be, used in providing such service and the rebate shall be allowed subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification." 38. It is the case of the respondent that the Place of Pr....
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....ice has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained (b)Where the recipient of service is not covered under sub-clause (a) - (i) the location of his business establishment; or (ii) where services are used at a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or (iii) where services are used at more than one establishment, whether business or fixed, the establishment most directly concerned with the use of the service; and (iv) in the absence of such places, the usual place of residence of the recipient of service. "Explanation 1: For the purposes of clauses (h) and (i), "usual place of residence" in case of a body corporate means the place where it is incorporated or otherwise legally constituted. Explanation 2: For the purpose of clause (i), in the case of telecommunication service, the usual place of residence shall be the billing address; (j) "means of transport" means any conveyance designed to transport goods or persons from one place to another; (k) "non-banking finan....
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....ce of Provision of Services Rules, 2012 in the Impugned Orders is misplaced. They are irrelevant to this case. 46. However, Rule 4 of the Place of Provision of Services Rules, 2012 pertains to services provided in respect of goods that are required to be made physically available by the "recipient of service" to the provider of service, or to a person acting on behalf of the provider of service, in order to provide the service. In this case, services provided are not in respect of any goods that are required to be made physically available by the "recipient of service" to the provider of service and thus Rule 4 of the Place of Provision of Services Rules, 2012 is irrelevant. 47. This stand was also given up in Order-in-Original Nos.28-30/2020- ADC dated 30.09.2020, which is subject matter of challenge in W.P.No.5886 of 2021. Instead, Rule 6 of the Service Tax Rules, 1994 was invoked. Similarly, Rule 6 of the Place of Provision of Services Rules, 2012, is also irrelevant. 48. As per Rule 6 of the Place of Provision of Services Rules, 2012, the place of provision of services provided by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educ....
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....venue, Ministry of Finance, dated 20.06.2012 operationalized from 01.07.2012. The above literature is also to be considered as Contemporanea expositio of law. Relevant portion of the said literature is reproduced below:- "Guidance Note 5 Place of Provision of Services Rules, 2012 5.1 Introduction 5.1.1 What is the relevance of the 'Place of Provision of Services Rules, 2012'? The 'Place of Provision of Services Rules, 2012' specify the manner to determine the taxing jurisdiction for a service. Hitherto, the task of identifying the taxing jurisdiction was largely limited in the context of import or export of services ... 5.1.3 What is the basic philosophy of these rules? The essence of indirect taxation is that a service should be taxed in the jurisdiction of its consumption. This principle is more or less universally applied. I n terms of this principle, exports are not charged to tax, as the consumption is elsewhere, and services are taxed on their importation into the taxable territory. However, this determination is not easy. Services could be provided by a person located at one location, actually p....
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.... territory, If the same service were to be provided to PQR (located in taxable territory) by an overseas provider XYZ (located in non-taxable territory), the service would be taxable, since the recipient is located in the taxable territory. However, since the service provider is located in a non-taxable territory, the tax liability would be discharged by the receiver, under the reverse charge principle (also referred to as "tax shift")." 56. Thus, it is clear that only Rule 3 of the Place of Provision of Services Rules, 2012 is to be applied, even if the service is provided in India. Despite the fact that service is provided in India to a recipient located outside the taxable territory, it is deemed to have been provided abroad if the conditions of Rule 6A of the Service Tax Rules, 1994 are satisfied. In these cases, admittedly services were provided by the Petitioner to Hypertherm (S) Private Limited, a Company from Singapore. Therefore, there is export of service. 57. Apart from the above, payments have been received by the Petitioner in convertible foreign exchange for the export of service to its group Company namely Hypertherm (S) Private Limited, Singapore. This also sa....