TaxTMI 
TaxTMI 
2025 (6) TMI 1598
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....o. Appeal No. Impugned Order Period of dispute Demand of Service Tax (in Rs.) Penalties (in Rs.) 1. ST/382/2012 OIA No. 10/ST/APPL/DLH- IV/2011 dated 30.08.2011 December 2007 to March 2009 12,00,588/- 12,00,588/- u/s 78 2. ST/545/2012 OIA No. No. 18/CE/APPL/DLH- IV/2011 dated 26.12.2011 January 2004 to November 2007 22,94,683/- 22,94,683/- u/s 78 3. ST/58584/2013 OIA No. 105- 106/ST/APPL/ CHD-II/2013 dated 05.04.2013 April 2005 to March 2007 16,12,987/- 16,12,987/- u/s 78; 1,000/- u/s 77 4. ST/53718/2014 OIA No. 101/Appl/Cus(D) CampChd/2013- 14 dated 07.02.2014 2004-05 to 2008-09 17,59,872/- 17,59,872/- u/s 78; 1,000/- u/s 77 2. For the sake of convenience, facts of the case of M/s Goodyear India Ltd are taken up as a base, because this Tribunal vide its Final Order No. 60725-60726/2023 dated 22.12.2023 decided two appeals of M/s Goodyear India Ltd. 2.1 Briefly stated facts of the case of M/s Goodyear India Ltd are that the appellant, M/s Goodyear India Ltd, are engaged in manufacture of tyres and tubes which are sold in the domestic market as well as overseas. The appellant have engaged co....
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....export of its products, delivery of which was taken by the foreign agents outside India. He also submits that the foreign agents dispatch the goods to the foreign customers outside India and realize the payment from the foreign customers outside India, which is remitted to the appellant; for these services, which are rendered outside India, the appellant pays commission charges to the foreign agents. 4.2 The learned Counsel further submits that the department is seeking to levy service tax on the aforesaid commission charges paid by the appellant to the foreign agents for services rendered outside India under the head 'Business Auxiliary Service' under Section 65(19) of the Finance Act, 1994 read with Section 66A of the Act, on reverse charge basis, which is the subject matter of dispute in the present appeals. 4.3 The learned Counsel further submits that the show cause notices issued to the appellant, seeking tax on the services rendered outside India on reverse charge basis, were adjudicated by the adjudicating authority vide Orders-in-Original dated 22.02.2011 and 30.08.2010 respectively. The adjudicating authority in his Order-in- Original dated 30.08.2010 recorded the fo....
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....rly supports the point being canvassed by the appellant. 4.8 The learned Counsel further submits that so far as Rule 3(ii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 is concerned, it is in the context of certain other services (not applicable in this case) creates a deeming fiction in its first proviso that certain taxable services, which are partly performed in India, shall be treated as performed in India. 4.9 The learned Counsel further submits that the rule invoked in the present case is sub-rule (iii) of Rule 3 ibid, which unlike sub-rule (ii), does not have any such deeming fictions, as enacted by the first and second proviso to the said sub-rule (ii). He also submits that sub- rule (iii) has altogether a different proviso which is also in relation to certain other services (not applicable in the present case). 4.10 He further submits that absent such deeming fiction of law as contained in two provisos to sub-rule (ii), any services which are admittedly and unquestionably performed/rendered outside India, cannot be lawfully treated to have been performed in India and therefore, they are outside the tax fold. He also submit....
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.... charge basis and not qua any second or third party. 4.17 The learned Counsel further submits that both the show cause notices are time barred. He submits that the allegation in both the show cause notices is of mere failure to disclose and not that of suppression and therefore, extended period of limitation cannot be invoked. He also submits that the department in the present case, as early as 13.09.2006 sought to tax the very same services under the head "Clearing and Forwarding Agent" under Section 65(25) of the Finance Act, 1994 which was duly responded to by the assessee vide its letter dated 08.03.2007 and thereafter the department accepted the explanation of the appellant and did not proceed the matter further, which clearly shows that the department was aware of the activities of the appellant and now the department has changed its position and seeking to tax the appellant regarding the same services under the head "Business Auxiliary Services" by initiating the present proceedings, which is clearly time barred. He relies on the decision of Hon'ble Supreme Court in the case of Nizam Sugar Factory vs. Collector of C.E., A.P. - 2008 (9) STR 314 (SC), which held that ex....
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....he overseas agents are received and utilized in India; whereas, the contention of the appellant is that the services are rendered and received abroad. 8. We find that both the authorities below, while passing the Orders-in-Original and Orders-in-Appeal, have recorded clear findings that the services have been rendered and received at the same time and entirely outside India. The said findings have not been questioned by the Revenue by filing any appeal against the orders of both the authorities. 8.1 Further, we find that once there are clear cut findings of fact that the services have been rendered entirely outside India, the same cannot be taxed in India by invoking the Rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, because the said rule in its opening portion contemplates receiving of services in India, which is clearly absent in the present case. Here, it is relevant to reproduce the statutory provisions of Section 66A of the Finance Act as amended from 18.04.2006 as well as Rule 2(1)(d)(iv) and Section 68(2) of the Finance Act, which are reproduced herein below: Section 66A: Charge of service tax on services r....
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....ent from which the service is provided or to be provided, or has his permanent address or usual place of residence, in a country other than India, and such service provider does not have any office in India, the person who receives such service and has his place of business, fixed establishment, permanent address or, as the case may be, usual place of residence, in India." Rule 2 (1)(d)(iv) as amended by the Service Tax (Second Amendment) Rules, 2006 vide Notification No.10/2006 dated 19.04.2006 - "2(1) in these rules unless the context otherwise requires- (d) person liable for paying the service tax means: (iv) "in relation to any taxable service provided or to be provided by any person from a country other than India and received by any person in India under Section 66A of the Finance Act, 1994, recipient of such service" Section 68(2) of the Finance Act, 1994 - "68(2) Notwithstanding anything contained in section 68 (1) in respect of any taxable service 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 i....