TaxTMI 
TaxTMI 
2025 (6) TMI 1356
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....ces like management of consultancy service, technical inspection and certification. Appellant used to undertake works on behalf of their clients to get their product tested and certified by non-certifying agency, for which they approached the appellant. Alleging that the amount paid by the appellant towards the foreign companies for testing and certification is taxable under Reverse Charge Mechanism (RCM) under Rule 2(l)(d)(iv) of the Service Tax Rules, 1994, proceedings were initiated and adjudicating authority classified the activity under "Technical Testing and Certification Services" and confirmed demand under Section 65(105) of the Act for the period from 01.01.2005 to 31.03.2009. Adjudicating authority also imposed penalties under var....
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....eceived in India in relation to taxable services is taxable provided that where such taxable services is partly performed in India and the value of such taxable services shall be determined under Section 67 of the Act and the Rules made thereunder. 2.1 Learned CA also produced a chart showing different category of services under which payments were made, which are as follows : Category of service Particulars Amount demanded Remarks Category I Service pertaining to the period from 2004 - 2006. Hence Section 66A is not applicable 47,48,149 The said services are not taxable as the provisions of Section 66A were enacted w.e.f. 18.04.2006 Balance 1,15,89,203 ....
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.... Category IV Reimbursement 45,25,532 Reimbursement of expenses pertaining to sharing of costs like Lotus notes, software allocation charges between Appellant and its parent Company abroad. Refer to pg. 116 of the Appeal Memorandum onwards. Hence not liable to tax under the category of import of services. With regard to demand of Rs.1,63,37,352/-, the learned CA submits that as per the category (i) i.e., where taxable service provided by a non-resident or a person located outside India; no demand is sustainable for the period up to 18.04.2006 since import of service was introduced only with effect from 18.04.2006. As regarding the category (ii) where both technical and testing certifi....
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....sion of the Tribunal in the case of Jet Airways India Ltd. vs. CST, Mumbai: 2016 (44) STR 465 (Tri.-Mum.) which is affirmed by Hon'ble Supreme Court as reported in 2017 (7) GSTL J35 (SC). 2.3 The learned CA also drew our attention to the audit report 12.08.2006 letter No. OC 3245L dated 12.06.2006 and the audit note and submits that as regarding the payment to foreign consultancy companies, it was known to the department in 2006 itself and there is no justification given by the adjudicating authority to confirm demand by issuing a show-cause notice on 04.02.2010 by invoking extended period of limitation. To substantiate the submissions regarding invoking extended period of limitation, the learned CA relied on following decisions: ....
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....ith effect from 18.04.2006. Accordingly, the demand prior to 18.04.2006 is unsustainable. As regarding the demand against category (ii) where both technical testing and certification are done by parent company in Japan, said service is fully performed outside India, hence conditions of import of service are not satisfied. Appellant is not liable to pay service tax on the said amount. As regarding category (iii) the test is done in India though the certification is done abroad, considering the taxation of services (provided from outside India and received in India) Rules 2006, appellant is liable to pay service tax on the said activity. However, considering the submissions made by the appellant regarding invoking the extended period of limit....