CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL BANGALORE REGIONAL BENCH - COURT NO. 2 Service Tax Appeal No. 20056 of 2018 (Arising out of Order-in-Original No.15 & 16/2017-18 dated 28.09.2017 passed by the Commissioner of Central Tax, GST Commissionerate, Bengaluru East, Bengaluru.)

The Commissioner of Central Tax GST Commissionerate, Bengaluru East, Appellant(s)

4^th Floor, BMTC Building, Old Airport Road, Domlur, Bengaluru – 560 071.

VERSUS M/s. Exilant Technologies Pvt. Ltd.

No.10, Chambers@ Matri, Respondent(s)

Richmond Road, Bengaluru – 560 025.

WITH Service Tax Appeal No. 20157 of 2018 (Arising out of Order-in-Original No.18/2017-18 dated 23.10.2017 passed by the Commissioner of Central Tax, GST Commissionerate, Bengaluru East, Bengaluru.)

The Commissioner of Central Tax GST Commissionerate, Bengaluru East, Appellant(s)

4^th Floor, BMTC Building, Old Airport Road, Domlur, Bengaluru – 560 071.

VERSUS M/s. Quest Global Engineering Services Private Limited (Earlier known as M/s. Exilant Technologies Respondent(s)

Pvt. Ltd.)

No.10, Chambers@ Matri, Richmond Road, Bengaluru – 560 025.

APPEARANCE:

Shri M. A. Jithendra, Asst. Commissioner (AR) for the Appellant.

Shri Akbar Basha, Chartered Accountant (CA) for the Respondent CORAM:

HON’BLE MR. P.A. AUGUSTIAN, MEMBER (JUDICIAL)

HON’BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL)

FINAL ORDER NO. 20301 - 20302 / 2026 DATE OF HEARING: 04.11.2025 DATE OF DECISION: 13.03.2026 PER: R. BHAGYA DEVI These two appeals are filed by the Revenue against the Order-in-Original No. 15 & 16/2017-18 dated 28.09.2017 and Order-in-Original No. 18/2017-18 dated 23.10.2017 passed by the Commissioner of Central Tax GST Commissionerate, Bengaluru.

2. Briefly the facts are that the respondent M/s. Quest Global Engineering Services (earlier known as M/s. Exilant Technologies Pvt. Ltd.) are into rendering of services under the category of Information Technology Software Services (ITSS), Management/Business Consultant Services, Works Contract Services, etc. The Revenue issued show-cause notices on the ground that the respondent had incurred foreign currency expenditure for receiving services from some of the overseas vendors and accordingly, as per Section 66A(2) of the Finance Act, 1994 they are liable to pay service tax. The Commissioner in the impugned order held that there being no evidence for any service being rendered, there is no ground for classifying the services provided by the third-party vendors either under the category of Business Support Services or ITSS, hence, dropped all the proceedings initiated by the Revenue. Aggrieved by this, the Revenue is in appeal before us.

3. The Learned Counsel submits that the branch office abroad was not self-sustainable and are extended arms of Head Office, hence, mere fund transfer to the branches without any service provided by the branch to the Head Office, there cannot be any liability of tax. Further, there is no documentary evidence available with the department to establish the provision of services. It is also stated that the service was provided by the overseas vendors outside India which was received by foreign branches outside India and there is no question of service being received in India. Any service provided outside India is non-

taxable service and the same cannot be taxed in India.

3.1. Further, it is submitted that the activities of the branch offices are not separate from the activities of the Head Office, but an extension of the activities of the entity as a whole. The funds so transferred was to meet the day-to-day expenses of the branches, since the branches were not self-sustainable and to maintain the branches outside India. There is neither invoices raised nor any consideration charged and there is no service provided by the branch to the Head Office. No documentary evidence is brought on record either to prove that the services were received from the branches or even to classify the said services as ‘Business Support Service’. Placing reliance on the dec