Bombay High Court
The Commissioner Of Service Tax-Vii vs M/S Life Care Medical Systems on 4 September, 2018
Author: Riyaz I. Chagla
Bench: M.S.Sanklecha, Riyaz I. Chagla
S.R.JOSHI cexa-82-2017
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CENTRAL EXCISE APPEAL NO. 82 OF 2017
The Commissioner of Service Tax- VII .. Appellant.
v/s.
M/s. Life Care Medical Systems .. Respondent.
Mr. Swapnil Bangur with Mr. Amol Joshi, for the Appellant.
CORAM: M.S.SANKLECHA &
RIYAZ I. CHAGLA, JJ.
DATE : 4th SEPTEMBER,2018. P.C:-
This Appeal under Section 83 of the Finance Act, 1994 (the Act) read with Section 35G of the Central Excise Act, 1944, challenges the order dated 3rd March, 2016 passed by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal).
2 Revenue urges the following questions of law, for our consideration:-
"(a) Whether on the facts and circumstances of the case and in law, was the Tribunal justified in holding that the services provided by the Respondent herein qualify as export of service under the provisions of Export of Services Rules, 2005?
(b) Whether on the facts and circumstances of the case and in law, the Tribunal is right in holding that the Respondent is not liable to pay service tax when the services are consumed in India and not at place outside India?1
S.R.JOSHI cexa-82-2017 3 The Respondent is registered under the category of 'Business
Auxiliary Services' as defined under Section 65(19) under the Act. It is engaged in the business of promoting/ selling medical equipments and also rendering after sales services like installation, commissioning etc. in India to a foreign party. The foreign party in turn pays commission to the Respondent for service rendered by the Respondent in India. It is the case of the Revenue that as the services are performed in India, Respondent is liable to pay service tax on its above service to a foreign party on Reverse Charge Mechanism.
4 The impugned order dated 3rd March, 2016 of the Tribunal held as the services rendered by the Appellant to over-seas party would not be liable to pay service tax, as it would be covered by the Export of Service Rules, 2005. It held that the issue is no longer res integra as it stood covered in favour of the Respondent by the decision of this Court in Commissioner of Sales Tax v/s. SGS India Pvt. Ltd., 34 STR 554 and allowed the Respondent's appeal.
5 Mr. Bangur, learned Counsel appearing for the Revenue submits that the decision of this Court in SGS India Pvt, Ltd. (supra) would not be applicable to the facts of this case. It is submitted that the entire service of selling and also providing after sales service is being rendered in India. Therefore, as the performance of services is in India, the Respondent is liable to pay service tax under the Reverse Charge Mechanism. In any event, without prejudice to the above, it is submitted that the decision of this Court in SGS India Pvt. Ltd., (supra) is pending consideration before the Supreme Court as notice has already been issued. Thus, this appeal would warrant admission.
2 S.R.JOSHI cexa-82-2017
6 We find that this Court in SGS India Pvt. Ltd., (supra) has
held that where services were rendered in India to a foreign party, then such service is not liable to tax as it would be export of service. Further, in fact almost similar to this case, this Court has held that the Service Tax would not be payable in Commissioner of Service Tax v/s. A.T.E. Enterprises Pvt. Ltd., 2018 (8) GSTL 123 in respect of an Indian Agent, rendering the services of marketing the goods of a foreign party within India and receiving commission from the foreign party, as it is export service by following the decision of this Court in SGS India Pvt. Ltd., (supra). In fact, we find that the Central Board of Excise & Customs has issued a clarification by Circular No.111/2009 dated 24 th February, 2009 that in terms of Rule 3(1)(iii) of Export of Service Rules 2005, it is not the place of performance but the location of the service receiver which will make it an export of services. It clarified that word 'outside India' to mean that the benefit should accrue outside India. The aforesaid Circular of CBDT is completely in favour of the Respondent.
7 In the above view, the question as proposed do not give rise to any substantial question of law. Thus, not entertained.
8 Accordingly, Appeal dismissed.
(RIYAZ I. CHAGLA,J.) (M.S.SANKLECHA,J.) Digitally signed by Smita Smita Rajnikant Joshi Rajnikant Joshi Date: 2018.09.10 16:08:33 +0530 3