Case Law Details
Gujarat Gas Limited Vs C.C. E. & S.T. – Surat (CESTAT Ahmedabad)
As far as demand of service tax in respect of services received by the appellant in respect of training of officers outside India by a foreign agency is concerned, the issue is squarely covered by the decision of Tribunal in case of M/s Firmenich Aromatics India Pvt Ltd. 2018 (10) TMI 655-CESTAT-AHD. In the said decision in para 6 following has been observed:
“6. We have gone through the rival submission, we find that liability of the tax of the question of law can be raised at any time. It is not in dispute that the training on which the tax has been demanded was under taken abroad. The services under Section 65 (105) (zzc) fall under Rule 3(2) of the Taxation of Service (provided from outside India and received in India) Rules, 2006. The services covered under the said sub-Rule is taxable only when the same are performed in India. In the instance case, it is not in dispute that the said service was performed outside of India. Therefore, there cannot be any liability of tax. The appeal on this count is allowed.”
Relying on the aforesaid decision, the appeal on this count is allowed.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
This appeal has been filed by Gujarat Gas Limited against demand of service tax.
2. Learned Counsel for the appellant pointed out that in the year 2007 they had received services in relation to training provided to the officials of the appellant company outside India by Foreign Firm. A Show Cause Notice was issued to them seeking to payment of service tax under Section 66A(1) of the Finance Act, 1944 read with Notification 36/04-ST dated 31.12.2004 and Rule 2(1)(d)(iv) of the Service Tax Rules 1994. Learned Counsel pointed out that it is not in dispute that training was provided to officials of appellant company in foreign location by a foreign firm located outside India.
2.1 Learned Counsel argued that in terms of Taxation of Services (provided from outside India and received in India) Rules 2006 only these services received in India can be taxed on reverse charge basis. He pointed out that the issue is squarely covered by the following decisions:
- Firmtech Aromatics India Pvt Ltd. 2018 (10) TMI 655-CESTAT-AHD.
- ABB LTd. 2019 (24) GSTL 55 (Tri.-Bang)
- CCE vs Maersk India Pvt. Ltd. 2015 (40) STR 1059 (Bom. High Court)
- Mothers on Auto Ltd. 2017 (50) STR181 (Tri. All.)
2.2 Learned counsel further pointed out that there was a certain demands in respect of training provided to their employees by foreign trainers within India. In respect of the said demand, the appellant has already paid the same along with interest and 25% of penalty within a period of 30 days from the date of Order-in-Original. He pointed out that despite the fact that the entire penalty under Section 76, 77 and 78 of Finance Act has been upheld.
3. Learned authorized representative relies on the impugned order.
4. We have considered the rival submissions. We find that so far as the demand in respect of training provided by foreign company within India is concerned, the same has been accepted by the appellants and amount of service tax along with interest and 25% penalty has been paid, therefore, the matter stands settled under Section 73(3) of the Finance Act, 1994.
5. Imposition of penalty under Section 76 and 77 are therefore, set aside and imposition of penalty to the extent exceeding 25% of the Service Tax under Section 78 is also set aside.
6. As far as demand of service tax in respect of services received by the appellant in respect of training of officers outside India by a foreign agency is concerned, the issue is squarely covered by the decision of Tribunal in case of M/s Firmenich Aromatics India Pvt Ltd. 2018 (10) TMI 655-CESTAT-AHD. In the said decision in para 6 following has been observed:
“6. We have gone through the rival submission, we find that liability of the tax of the question of law can be raised at any time. It is not in dispute that the training on which the tax has been demanded was under taken abroad. The services under Section 65 (105) (zzc) fall under Rule 3(2) of the Taxation of Service (provided from outside India and received in India) Rules, 2006. The services covered under the said sub-Rule is taxable only when the same are performed in India. In the instance case, it is not in dispute that the said service was performed outside of India. Therefore, there cannot be any liability of tax. The appeal on this count is allowed.”
Relying on the aforesaid decision, the appeal on this count is allowed.
7. Appeal is disposed of in above terms
(Pronounced in the open court on 18.04.2023)
