Karnataka High Court
Commissioner Of Service Tax vs M/S Aravind Fashions Limited on 13 April, 2011
Bench: N.Kumar, Ravi Malimath
BETWEEN: * _E&nga¥@s-=§ «-;-.562, .HRES?G§'=iBE§\f'§" K.E';-«.._Ra:{~é's%*®%*:i<a:1, §\dv&{:a%e} IN "mg HIGH Cttmm" er: KARNA'?.é§<A AT BANQALQRE 1:3ATE§ THIS THE 13"?" DAY GP APRIL 2:321 £&E_S..E.fi1"
THE HONBLE MR. EUSTICE N.KL}::§f:A,:2f j:V AND 'V & 1' V V mg HOWBLE MR. EUSTECE R.Avu:VL'Lr»<z}x':w:_r§4;&.fF~:« CEA¢No.113' VA Ccmméssiener cf Serasiige _ Service Tax Comm§$'s'i'uf_a««efaiQ{ ' NQJL6, SP. Compiex,uLaib';agh"§"ioat§;j H Bangaiare »» 56cm--27y":: "'~~~~".'.APPELE._ANT E {By Sri. rm. Bi'éa_ska r,'z*§d'~;.%5'e§t:&} "a:I"" ' AND;
;v§/s,.;s:<a,vé zacé' §"7ash{:'o 61$ Lir'fié';:e,d__g_.. » Na 1.; #3 C's"r>s$_,§ «_ B6§"?"&¥"£":;'gS7€:iV§.3G'::T»?3 £~n;a?u$itri'a§._;€xrea; *€%-*''¢<4*-2e«'~'»-~- »« - ;« -«\-. KW»WK3XWA% Wwu V _ 3% ?zL's~,zm._;%;7i,§§dd;~ cm me vaiue df' R5,8,8§,,2iS,GGG,f~ far the This CEA flied under Sectidn 3§G of the Centrai Excise Act, 1944 arising out 92' order dated O5,02i2007 passed in Finai Qrder No, ESCUEGO? in apgeai Nd ST/316/2066, praying ':0 farmuiate the sashst.3'i*..'i:ia§ question ef iaw stated therein, sat agide the Finaiii}-r_de.r 180/280? dated d5.o2.2dd:2 in Apgeai rm ST,{'.f%_1"€:,§:§é:€3'{36"'<_ passed by the CESTAT; in the interest: Of_j~i:1_S'CE§f€.:';'€i_fi{§._. . equity.
This CEA «coming an far »§'."i..;€.?,f'<T?{!'i.i4"§-Q %°'~J.i<UF\'EAR 3,, deiivered the foiiowéngiif }UDGVi§€f;f;;ji3imW'f(> X This appeal is by,.-due re;Axre;u_de '€,'i»'-1§3i¥e.'r1dg'i'r:g {fie order' passed by the Trébunafiididiiggf':'»é:iv1d%1£i§A'é"arssessee is not iéabie to gay 'Covered under this drder 33 i;fj§ 'irji_CiM§V:iV'&3E}iE§t\,;' td pay the Service ,ta><d. i M
2. ""3TE'i"°'¥€: 3'3sé$$eé"'~.EVi§s.Arvind Fashion'; Ltd; have iendgjfetddi.ia><a5'E£3._ §d:"vE{:@ is their ciients faiiing under the %:a%t.e§i.:r§} cdnsuiting finance wiimut dbtainéng Eg:-:g7iS_:%a"%;'i§?:$i_2..Vadd'i}¢ii:i'1@:.:t gaymézzt 9? service tax id 'me tune 3 as '_ .-
§ aomwmmiivammu A '~:Lf'eeeee.: eeme within the eetegery ef the deféedtéee ef peried of 1999«~2€3QG to 2002»~2CIO3. A shew eeuee F1-C:fi i{:e came tad be iseued eeiéing aspen the assessee if.) sh'e<;xr:':e4{;s.ev.. as to why a demand ehouid not be made fer i:hfe_ 'efereeeidfle M service tax with interest end pe:*:éI'i~g. ' "__T1'3ef'eeseseeexfi entered appearance and fated its coA:u:jj£e_:A'eeie't:_.;§g. out"
they are net the service prevEd"'efe,»t%1e§,!~ere--..AtEfive ui*e4e'é"e":ente of the eervice and therefceje, tee%e'i_;s eh;-L.fiabéI'i'i:y"~E:*2~§ezrv an a recipient of e seirvice to eafz't1'{e--.§e:rvi1ee:.t_e§{".--..A<::::epting the seie cdeten:ie.n,qt§we dropped the further gjrec:eed:;'ee"$"."3L.__E-iew;ev'erf_, Cemmiseiener Eseued 3 Show cauee-Ane;téee'§iA:fe§*'revéewihe-i:'E91e aforesaid order and after he'e{é§:g the eé;s;;eiss_feee.f:""?f:.eSet aside the drder passed by the Aseeeeieg' -._%?x:i':Vi§or..'§~*iiy and Eevéed the eerviee tax, ~'"~e_jnte.§feetE'__eE2ej eee'e%t§z..._..' Aggrieved ey ihe seid erder, the Leeee::e_e'e4:eere€e';*e-ed en epeeaé {G the Tribuneik Tee Yrébeeai ;*e§§gé'é:«g ee 'eeieeizjit ten jedgmeete rendered by them came fie 'V._»t%*2e eeefiueiee that the reeeiet ef teeeeieei eeeéeieeee i 3 a?
S 5 _éVf;§ is 5 rsonwresidené" er is from autside ('E') (C) 50') (8) (3 any company estabiished by or under the-"'-._> Companieg Act, 1956 (.2 of 1956);
any z::or;;3eratz'c.>n estabiished by or --I~ any law;
any seciety SOCf€*i"i63$ Regzstratian that xfsct in force in é;'§n.y ;3ar§ (3;f'.7f?§:'gi3V'':;' ' any C0~C),!:}€§:§"é3.§iV€ é.+'.3"<':i'<,1r'$:fZ»'VVéf:3.ta§i§§}?'ed"".E2y Qr under _V any dealerjef .i.ef>xrc:;:3%a1§31<e".A';g,7c§§:%:iis,'" wire is raggisfggfiéd :}.{2cf:-3r~'}ff:E,*' :¥C§é.%}tr§féExCise A523, ,:'z;;ie5 made the thafe :§.é:?,g;i§'r',<.. _ V' "
_a?'%;ié"v.*»Vt2Qfi2*;z :f;:§7rj,:?_orate established, er a ;::art;*2ek*s:}_'7¢%;:j"':'?£;:}}'*;'r regfitered, by er under gm 35- fa w;
an? iwcaisfe service garovidea' by a person f§?*';c3'§§_',. 5955' mi? have any arffice fr: fndia. 2» .
x T €"}':a i*}'rs€ day ofjanuary, XQGS."
'7';'é;'s ;'m:°;'f§€§§';'9.»*? shais' game infs farare an E;/' reg£5ter"ed"'« .:,fn'Q'€::« .
~i85::»*.{{2'.:.. "V T'T X 1860) Or under a:*iy'«{aW CE;sffé§po:;§i;:;;v,{Q Further i\i0tificat:'on NG.24,f.ZOG5--S.?"} .._ ';_ dated G;7««J::ne:~«2QO5", wag issued wfzich as under: ~ Service tax iiabiiity whe{2...rJ:f; ;:3@:*s§é:7' . than Serwte praviders¥:Am:e;édn§?epfi'€.A.' Notificaticm I\!a.36,/2€l?04p:$,T. A ' A A In exercise of the pbwiéiis ::*or7 fe;fre;*r:(A secifan (2) 9f gefrtion Ffié&ri§é Aft, .2994 (32 of 199}4};«. t/vjé <§j.\:%;;+:z«Lz:;:»i%%j"*:_:;;n/ernfzcénz, on bemg satisfied trig: 'iV£* k'.e§ .r:~e}.f::§é?g';<s{§i_f;»«* in the public izjfefest 'id"«.%?e;eby"';«'}?7akes the féfii/OW_§l."--?_C;'7. hi) tifica tier: of the ff; xfhe Ministry cf §:;:;;m::e.L ;§%o}eg5;:.§r:n§e.rj:z sf was}: ye) No. 3652004- Se;'v;€::,fe 315* Beciember, 2904 Wf?i;C';-L34'VJflSvVg3U'i3?fS.fié?{?"4i}? the Gazette cf India}, ;i7,v:fra0'§:{f;fr3A;é:';v§ 'vidfe number G.SI.R.849('E), ' ?a'a;€;ed.A_zff2e .,§2'5"*'Séicemb@r, 258-4, zvamefy:
" " .. V §mv_v§:'<3e« ..§é:>:i;'_ rzQ$iz";'<:a:'i<}n:
"~ __ {§~$A--. 4y';;}VV.T';:;§?agrafih (C51), is? $ub--,aaragr&;3f: (six), ' ?%§A§€em {' S ,1, far" the wgrafg "es:abf:E§h&a" éy car under", {he w:':»ra'5 "farmed gr rggigtergaf ::3:?::3'€r" $33!! be gubsffifmfed' ,,,, 22 /' §/' ,.';e.=:=a.:f:*i0Ez; ._ b5-v 7thé- ééxabie service, and such ..':_ *z"a,;%;a:::£e 3@5fvs'::e«"shai§ be greases' as if the __:23{_f,'i§:2;'e;;fé§'v§;aa' bimgeif pmvided ma gérvfce sin _ '$525;-v'gC50rd§ngiy aif ihe prca/ESEQIES $2' ifsfs A a1'i:.;s:';3;iféf:§;*f'2aE§ a;::>9i;z: %,;./ _.,11.._.
"S643. Charge of sarvice fax an S€*i'ViC€E'S _ reseived fram oufgide fnd1'a.~{Z} Where service Specified in clause (1536) cf s&*C£",.r0;2.__éS5 fgfm V _ (3) provided or to be pravfgiegi who has esiabiisfzed aI:;bu$i} }é:;§".Qf fja§'a~..,, fixed e$t3bli$hmgnz: whi£jf_:_M'A"i?he V' .
service is providéd,:;brV_%ta AZ§e.__p:"Q}}i:;feE2F 'i3rV~ has f"z;'§ permanent ;3é__(.?'{:fzfe;3.$ or :33-ugafl plate 0:' residen:*§;'~..;'n 5:3 :_£::§'a;r§z:":f§k'-..Aotf2er'A than India, and H 'V V . __ ( b ,1 reCe_:f§4.:::i .:,}z;:é}*sg:):'2'- ~f;'?'ereinafter re§?err%§€f._._tG, %a+; r_féci;3 fe}é:f}"V--who has his ip/aégé bf VA-V'fix'¢3d establishment, 'pé}fma}§§;3':':t'"agii-dres§""'::>}' 5355,55! piace ::zf '-- re5i'd'e?i1ce} .fs%' -fhdia, ' Szzcjfi-.. §er*.}i5cs=é the purposes" of this g ._12.__ Provided that where the recipient as' the servifie is an z'ndiw'dua! and such servzfie received by him is otherwise than for five". gurpose of use in any buginegs Of commercii the prewsians of £"b;'s sub--se<:ti¢:>n ghaffl ;9::§i=< fj--« 'V' V appiy:
Provided further that z'§<.berTé .{2:'":e"TT,:3_1frz:w E{:'e'i },[,,. G2' the gervice has f2£sV.;'3:a§sir?e$:f.vé::tab!f$?*§;A}2§{§t "
both in that ccuniry elsét-1z.z_Af7'eré%=, ctcuntry, where the §33t.éz.Zg§£S}%.::j2enf""ef fhe provider of ${i'f"VIfi£'-;Z;1'i!f€'CZ"l}f_'<:O4f'i£f}fE;'!%}7Gbd with the provisican Qf servicg.{o§f}§tr§3d,'"si§;3i! treated as the§--c<;ssT;{§:'ry1_frc;*m' Vservfce is pr0vig3'éc§"Qr5€fa':'--;':é ,{j_;<g3 vsZde(f. H » """ '{2}'. §fi'}§'§eré'~.gé' peE$a'n is carrying an 3 b'u§:':7es5: ffé}fa{4jgbV'g::-eérmanent ggiabfisfzmeni in ;§7:':dr'.a ';;":*s7&;'. ihfflijgh anoifser germanené :V'=3safab!':jé:'2.§2?&*r;'i" 3.?! av CS£.i:"?i"!'}/" sther man frrdiés, *s::;--:::f: » p€r!;!v'?&':":<':-'I?f €s:ab£:'shmer2€"5 shaif 56 is-+a&~21"efa:i"':3s separate persons far' we pazmases fir" éiiégfg Séfigfflfia eé'1?:'*,eéE~c:,_§*e*;'e~.V£;h*.ssf: abave eaié amendment, the ree§;:£ent ef W 13 _.
Therefore, if is clear that frem I8m4~2G05 we service provided by e persen M20 is eutside the ceuntry end whe hes no fixed.--._ establishment or permanent eedrese in Country, such 3 texebfe service Sheff be t:fe_.§;é'teéj_' es if the recipient: of service previdec! the service in Ind5'e"'fe;;--:ff e;jce;Vff_?d§7;';}V: 5/! the provisions of this CHepfef*~:§heei,¥_egfgiéfi Therefere prior to z8~.4>;?_O06 'it'.%'2_e" sen.;«;¢aee«:
was net payable by the 'fegfipient, V§;*3__tf:re.V-Zexieniwm the service gxrovfider wes"'e:"gtsitfe. the"ceu.m§ry and he had no pei-2%}enez:t?v;.,é3.5'ereee'er place sf buemess within these circumster;'ee;* 2:3,/vex; by the e;3peIg'a%e _~._e£e2i:*$_Q§it§§:j,,,.,%'e.i;{;;ig:._:e:z ' the eforeseie' Jgdgnéerffs 5<.e;;f__ High Ceurt end Seihf eggs; ;{::T}:e:ri'@;?:35'rz_nr3t_' be found fault with, Aeeerdingfy ":s§fe._»Tde__T ?:.et--~ gee any merét in {hie e;::pe}::ri.._V % Hen {-T_@_,A ' if :'.:s:. ifismiseee . "
V-':__'u':<fi\g,..e:§%e eeriedfer whieh the service tax was daimee i?iee*ere§ce'%i.e§; me eeéigatien fie pay Ehe eewéce tax, 1 1,