Page 161 - ELT_1st June 2020_VOL 372_Part 5th

2020 ] INFRA DREDGE SERVICES PVT. LTD. v. UNION OF INDIA 695

ed from the wrong provision of law and that an affidavit of the petitioner placing
certain factual position on record supported by the decisions of the Tribunal has
not been considered at all even though it was on the record.
10. The operative portion of the impugned order regarding Dry Dock-
ing reads as under :-
“6(iv) the services received by the Noticee in India under said agreements
from SSSHIPL related to dry docking (maintenance & repair) of dredgers
are classified under the category of ‘Management, Maintenance or Repair
Service’, as per definition contained in Section 65(64) and Section
65(105)(zzg) of the Finance Act, 1994 read with Section 66A of the Finance
Act, 1994 & Rule 2(i)(d)(iv) of the Service Tax Rules, 1994.”
The liability therefore is imposed under Section 65(105)(zzg) of the Finance Act.
The discussion and conclusion about how this liability is imposed is in Para 5.22
of the said order, which reads thus :-
“5.22 The noticee further contended that the demand of Rs. 10,45,71,398/-
in the category of Management, Maintenance or Repair services as defined
under Section 65(105)(zzzg) of the Finance Act, 1994 was not maintainable
as the same was rendered outside India. It is admitted position that the no-
ticee had made payment in foreign currency to SSIHPL for repair and
maintenance of the ‘goods’ during the period their dry dock. The noticee
was the recipient of service situated in India. The service provider was situ-
ated outside India. In respect of maintenance and repair services it is not
mandatory provision of the rule that the article undergoing repair and
maintenance should be located in India. Therefore, as per the provisions of
Rule 2(1)(d)(iv) of the Service Tax Rules, 1994 read with Section 66A of the
Finance Act, 1994, the noticee was required to pay service tax under reverse
charges as being recipient of service located in India in respect of service
provided from a place outside India. The demand of service tax totally
amount to Rs. 10,45,71,398/- for receipt of ‘Management, Repair and
Maintenance Service’ falling under Section 65(105)(zzzg) of the Finance Act,
1994 is therefore maintainable.”
In the discussion, at both the places the Commissioner has referred to Section
65(105)(zzzg) of the Act.
11. Section 65(105)(zzg) relates to ‘Management, Maintenance or Repair
Service’ while Section 65(105)(zzzg) refers to ‘Mailing List Compilation and Mail-
ing’. It is not even the case of the respondents that the activities of the petitioner
are in relation to Mailing List. Taxation of Services (Provided from Outside India
and Received in India) Rules, 2006 have been framed. Rule 3 has categorized dif-
ferent activities. Rule 3(ii) deals with categorized sub-clauses (zzg) and (zzzzg)
and does not include (zzzg), which is referable to Rule 3(iii). Rule 3(ii) and Rule
3(iii) deal with different contingencies. Rule 3(ii) refers to services provided in
India and Rule 3(iii) refers to services received by a recipient located in India for
use in relation to business or commerce. These categories would require a differ-
ent conclusion and approach. It is clear from the impugned order that there is a
mix up between the provisions. This is attributable to the delay that has occurred
in passing the order. A clear prejudice that has arisen to the petitioner.
12. The second ground put forth by the petitioner is that the Tribunal in
the case of Reliance Industries Ltd. v. Commissioner of C. Ex. & S.T., LTU, Mumbai
[2014 (36) S.T.R. 820 (Tri. - Mumbai)] has emphasized that operations must be
EXCISE LAW TIMES  1st June 2020  161