TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 397
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....tivities carried out by the Appellant is eligible for availing the benefit under Export of Service Rules, 2005. Appeal No.ST/1320/2012 pertains to period from March, 2005 to March, 2008; Appeal No. ST/1318/2012 is for the period from April, 2008 to March 2009 and Appeal No.ST/1319/2012 pertains to period from April, 2009 to March, 2010. 2. Appellant is mainly engaged in repair and maintenance of ships. During audit, it is observed that in respect of repair and maintenance carried out on foreign ships, since the payments are received in convertible foreign currency, service tax was not discharged by them by claiming the benefit under Notification No.21/2003 dated 20.11.2003 which was reclined vide Notification No. 10/2005-ST dated 03.03.2....
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....ST dated 03.03.2005. Thus, from the impugned order, it is an admitted fact that the Appellant has carried out the activities as declared under 'Management, Maintenance or Repair Service'. The only dispute is whether the repair service rendered to foreign ships amounted to "delivery outside India" and "used outside India" for the period prior to 01.03.2007. In this regard, the Learned Counsel submits that the activity carried out by the Appellant on the foreign ships certainly amounts to delivery outside India and used outside India. The Learned Counsel drew our attention to the Circular No.111/5/2009-ST dated 24.02.2009. Thus, for the service falling under 3rd category of services under Rule 3(1)(i), it is possible that Export of Service ma....
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.... and the entire transactions are reflected in the books of accounts. Since the demand is based on the audit objection, it is hit by the limitation. Further the penalty is also unsustainable even if it is held that the Appellant is liable to pay service tax for the activity since it is not paid due to bona fide belief of non-levy arising out of interpretation of statutory provisions which constitutes sufficient reasonable cause. This view was upheld by Hon'ble High Court of Karnataka in the matter of Commissioner of Service Tax, Bangalore vs. M/s. Motor World: 2012 (27) STR 225 (Kar). 5. The Learned Authorised Representative (AR) for the Revenue reiterated the finding in the impugned order. 6. Heard both sides. As regarding the demand ....
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....or such service provided outside India is received by the service provider in convertible foreign exchange. However, as the phrase delivered outside India' in rule 3(2)(a) did not provide clarity with respect to intangible services, this expression was replaced w.e.f. 1-3-2007 by 'is provided from India and used outside India'. The Circular dated 29-4-2009 issued by CBEC clarifies that the relevant factor is the location of the service receiver and not the place of performance and the phase 'used outside India' is to be interpreted to mean that the benefit of the service should accrue outside India. The term 'used outside India', therefore, means that the service is provided to such a service recipient who is loc....
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....ect service (a Category I service [Rule 3(1)(i)]), even if an Indian architect prepares a design sitting in India for a property located in U.K. and hands it over to the owner of such property having his business and residence in India, it would have to be presumed that service has been used outside India. Similarly, if an Indian event manager (a Category II service [Rule 3(1)(ii)]) arranges a seminar for an Indian company in U.K. the service has to be treated to have been used outside India because the place of performance is U.K. even though the benefit of such a seminar may flow back to the employees serving the company in India. For the services that fall under Category III [Rule 3(1)(iii)], the relevant factor is the location of the se....