Custom, Excise & Service Tax Tribunal
C3I Consultants India Pvt. Ltd vs Commissioner Of Central Excise, ... on 18 February, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 20240 / 2014 Application(s) Involved: ST/Stay/25011/2013 in ST/25014/2013-DB ST/Early Hearing/25319/2013 in ST/25014/2013-DB Appeal(s) Involved: ST/25014/2013-DB [Arising out of Order-in-Original No. 14/2012 dated 15/10/2012 passed by Commissioner of Central Excise, HYDERABAD-I C3i Consultants India Pvt. Ltd. Plot No. 51, Kodali Towers, Balaji Enclave, Diamond Point, Secunderabad 500009. Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax - HYDERABAD-II L.B STADIUM ROAD, BASHEERBAGH, HYDERABAD-500004 Respondent(s)
Appearance:
Mr. Ajay Gupta, C.A. For the Appellant Mr. A.K. Nigam, A.R. For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER ________________________________________ Date of Hearing: 18/02/2014 Date of Decision: 18/02/2014 Per B.S.V. MURTHY Appellant provided service of verification of antecedents, financial credibility, copy right infringement, etc. for Indian and foreign clients. There is no dispute about the fact that service provided by the assessee fall under the category of Security Agency service. The appellant paid service tax in respect of the services provided in India for Indian clients. However, in respect of the services provided to the clients located abroad where the payment was received in convertible foreign exchange they did not pay service tax as this service amounted to export of service. Since the assessee has not paid service tax during the period 2005-06 to 2009-10, proceedings were initiated and as a result of proceedings, an amount of Rs. 61,41,382/- has been demanded as service tax for the services rendered to foreign clients under the provisions of Section 73(1) of the Finance Act, 1994, with interest. Penalties under Sections 76, 77 & 78 of the Finance Act, 1994 have also been imposed.
2. Learned Chartered Accountant on behalf of the appellant submits that in this case, the only ground on which service tax was demanded is that the entire service was performed in India. He submits that the decision of the Tribunal in the case of Commissioner of Service Tax, Ahmedabad vs. B.A. Research India Ltd. [2010 (18) S.T.R. 439 (Tri.-Ahmd.)] covers the issue and therefore, the appellant is eligible for complete waiver.
3. Learned A.R. on behalf of Revenue submits that according to the order-in-original, services provided by the appellant are covered under category (ii) of Rule 3(1) of Export of Services Rules, 2005 and in this category; services based on the place of performance are covered. Learned C.A. also agrees that services provided by them are under this category only. Learned A.R. submits that while it is accepted that entire service has been rendered in India and therefore, if place of performance is to be considered, the service could not have been considered to be exported. However, the rule also provides that where the service is partly performed in India and partly performed outside India, it has to be treated as export of service. The only question arises in this case is whether the service can be considered partly performed abroad since the claim of the appellant that in view of the fact that delivery of service has been made to the client located abroad, it has to be considered as partly performed abroad. He submits that in the absence of any evidence to show that final report has been sent to the foreign client abroad and has not been delivered in India, the services have been performed in India and delivered in India and therefore, the services cease to be export of service.
4. After considering the submissions made by both sides, we find that the issue falls in a narrow compass and it can be finally decided. Accordingly, requirement of pre-deposit of the dues is waived and the matter is taken up for final hearing.
5. After going through the adjudicating order and the show-cause notice and considering the submissions made by both sides, we find that there is absolutely no evidence to show as to where exactly the report has been delivered or by what mode it has been delivered. Learned A.R. submits that the report has been delivered to foreign client. In fact, even the Commissioners observation lacks clarity in this regard. The Commissioner has recorded his finding as under:
Though the service recipient is located outside India, the services are wholly performed in India. This fact of performance of service in India is not disputed by the noticee except for contending that the report is delivered to the client outside India. Once cannot say that mere delivering a report outside India would tantamount to performing a service outside India. The delivery of report does not involve any service to be performed, on the contrary it is only passing the result of the performance of service in Indian Territory. It can be seen from the portion of the order-in-original extracted above that the Commissioner has not at all taken the issue as to whether the delivery of report to the client located abroad and where it is used amounts to part performance abroad or not. He has simply gone on the assumption that delivery of report is not a part of performance at all. According to him, since service has been rendered only in India even though report has been delivered to the client abroad, it has to be treated as entire service performed in India and not part service performed abroad. From this, it can be seen that learned A.R. is making a new case which was not in the show-cause notice and it was not found in the order-in-original also. There is not even a finding that delivery was made to the foreign client in India. There is no examination of this aspect at all by the Commissioner. There is nothing in the show-cause notice as to how the report has been delivered. In the case of B.A. Research India Ltd. (supra), while considering this issue, the Tribunal has taken a view that delivery of the report abroad is essential part of the service. The service is not complete unless it is delivered to the client abroad. Since the issue is squarely covered by decision of the Tribunal in the case of B.A. Research India Ltd. (supra) as regards part performance, we consider that in this case also the service has to be treated as partly performed in India and partly performed outside India and therefore, it is covered by Export of Service Rules, 2005. No contrary decision to the decision of the Tribunal in the case of B.A. Research India Ltd. was produced before us. Therefore, we are bound to follow the decision cited by learned C.A. In view of this position, the appeal is allowed with consequential relief, if any, to the appellant.
(Dictated and pronounced in open court) (S.K. MOHANTY) JUDICIAL MEMBER (B.S.V. MURTHY) TECHNICAL MEMBER /vc/