BMD PVT. LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants are manufacturers of Automotive Laminated Fabrics. They had entered into an agreement with M/s. Gamma Holding N.V., Netherlands engaging them to provide the following services to the appellants.

(2.) They made payments in pursuance to the above contract to M/s. Gamma Holding during the period Jan 2007 to March 2008 but did not pay service tax on such payments. Revenue was of the view that the service received by them were classifiable under services of "Management and Business Consultant" defined in Section 65(105)(r) of Finance Act, 1994 and made out a case the appellants should have paid service tax under the provisions of Section 66A of the Finance Act, 1994, on such services received and paid for.

(3.) AS per provisions in Taxation of Services (Provided from Outside India and Received in India), Rules 2006 the question whether the service in question is imported is decided with reference to location of the recipient of service for service specified under Section 65(105)(r) but is decided with reference to place of performance for service specified at Section 65(105)(y). That is to say if the impugned service is classified as Management Consultancy, service tax is payable in the present case but if it is classifiable as service of Market Research Agency then tax is not payable for the reason that the service is performed entirely outside India.