2026 (5) TMI 1670

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....e notifications Nos. 15/2017-ST and 16/2017-ST dated 13.04.2017 at Annexures-A and B on various grounds including that the said notifications lack legislative competency and ultra vires the Finance Act, 1994. Consequently, the petitioner has sought for setting aside of the demand notice at Annexure-F. 2. Petitioner at the time of arguments has submitted that the amount already collected pursuant to proceedings conducted in connection with the notifications at Annexures-A and B are required to be refunded. It is the case of the petitioner that he is a manufacturer in India and makes imports on Cost, Insurance and Freight (CIF) basis. It is further submitted that the foreign supplier bears the cost of freight for the transportation of good....

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....ion to FOB contracts, the observations of the Gujarat High Court made in the context of CIF, striking down the impugned notifications would be applicable. The observations made by the Gujarat High Court in the case of Messrs Sal Steel (supra) at paragraph Nos. 22, 23, 25, 31, 33, 34, 35, 36 and 38 are as follows: "22. In the case on hand, indisputably, the overseas sellers/suppliers of the goods have made contracts with the shipping line/shipper for sea transportation of the goods, and such overseas sellers/suppliers have made payment of transportation charges to the shipping line; and admittedly there is no contract nor any arrangement between the petitioners (who are Indian importers/buyers of the goods) and the shipping line for....

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.... mass of the country, and hence in the nature of an extraterritorial event. The provisions of the Finance Act, 1994, which is an Act of the Parliament for levy of service tax, do not permit nor empower the Central Government to collect service tax on such extraterritorial events, and the services which are rendered and consumed beyond the land mass of the country. 31. A perusal of section 94 shows that there is no power conferred upon the Central Government to make any Rules or notifications for extraterritorial events; or in other words, for services rendered and consumed beyond the "taxable territory", i. e., beyond India. Obviously, the Act itself is not applicable to the territories other than India and therefore the executives....

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....t lays down that every person providing taxable service to another person shall pay service tax; and thus the primary obligation to pay service tax is on the person providing such service. 38. But the importers in CIF contracts, i.e., the writ applicants herein are neither service providers nor service receivers in respect of transportation of goods by a vessel from a place outside India up to the Customs station of clearance in India. Section 68(1) and also the reverse charge notification under section 68(2) permit the Central Government to collect and recover service tax only from the person providing the service or from the person receiving the service, and not from a third party. The rule-making power of section 94 also does no....