CONSULTANTS INDIA PVT. LTD. Vs. C.C.E.

JUDGEMENT

(1.) 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. 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 v. 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.

(2.) LEARNED AR 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'.