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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, BANGALORE
P.G. CHACKO, B.S.V. Murthy, JJ.
V.V. Kay Marine (P.) Ltd. -Appellant
Versus
Commissioner of Central Excise, Visakhapatnam -Respondent
Misc. Order No. 25313 of 2013 Application No. ST/STAY/2360 OF 2012 Appeal No. ST/3257 OF 2012, ST/3257 of 2012, ST/STAY/2360 of 2012
Decided On : 28-02-2013
G.P. Sastry,Ms. Sabrina Cano
P.G. Chacko, Judicial Member - This application filed by the appellant seeks waiver and stay. The impugned demand is on 'management, maintenance or repair service' provided by the appellant to marine vessels owned by foreign companies during the period 2005-06 to 2009-10. The appellant provided the above service from their SEZ unit. They repaired and maintained certain electronic equipments onboard the marine vessels and received the consideration for the service in foreign exchange. The repairs and maintenance were undertaken when the vessels were anchored in Indian territorial waters. From have been exported by the appellant. One of the conditions for export of service was fulfilled by receiving the consideration for the service in foreign exchange. The other condition to be fulfilled is that the service, though provided in India, should be shown to have been used outside India. After hearing the arguments of both sides, we are of the view that the appellant has, prima facie, satisfied the said condition also inasmuch as the benefit of repairs and maintenance was enjoyed by the service recipient only when the vessels were in voyage. However, an amendment to the Export of Service Rules w.e.f. 27-2-2010 is found to be adverse to the appellant inasmuch as, as per this amendment, the service, to be held to have been exported, should have been performed outside India. In the present case, admittedly, the service was performed within India and hence the appellant is liable to pay service tax on the service for the period from 27-2-2010, which amounts to around Rs. 62,000. After considering the applicability of Section 78 of the Finance Act, we are of the view that the appellant should pre-deposit an amount of Rs. 1 lakh (Rupees only lakh only) (offered by their counsel also) towards the apparently sustainable part of the demand of service tax and penalty, within six weeks. Report compliance to the Deputy Registrar on 21-5-2013. Deputy Registrar to report to the Bench on 27-5-2013. Subject to due compliance, there will be waiver and stay in respect of the balance dues.
