Liability of Appellant to Pay Tax on Business Exhibition Services Received from Foreign-Based Service Providers

Department’s Allegation:
The department alleged that the appellant evaded service tax on the services received during the period from December 2012 to September 2013. 

The case concerns the appellant’s liability to pay service tax on amounts paid or remitted to foreign-based service providers under the Banking and Financial Services category, on a Reverse Charge Mechanism (RCM) basis. A show-cause notice dated 2nd January 2014 was issued, proposing the recovery of service tax along with interest and penalties under Sections 76 and 77 of the Finance Act.

Findings:

1. Rule 6 of the Place of Provision Rules, 2012- In this case, the exhibitions were conducted outside India, placing them outside the taxable territory. According to this rule, the place of provision for Business Exhibition Services is the place where the event is held. 
2. Mega Exemption Notification No. 25/2012 dated 20th June 2012- This notification exempts services provided by an organizer to any person in respect of a Business Exhibition held outside India. The services provided were exempt under the law, rendering the demand invalid.
3. Show Cause Notice demanding service tax under the omitted provisions– It was observed that the impugned show cause notice dated January 2, 2014 is invalid as it was issued under erstwhile Section 66 of Finance Act, 1994. The amendment as per Notification No. 19/2012 dated 05.06.2012 has made the erstwhile Section 66 inoperative with effect from 01.07.2012. Therefore the Show Cause Notice issued after the amendment under the erstwhile provision was held invalid.

Decision:
The adjudicating authority held that the order was not sustainable on both technical and substantive grounds.

• The Order-in-Original (OIO) was set aside.
• The appeal was allowed, and the appellant was granted consequential relief.

AKSH OPTIFIBRE LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & CGST, ALWAR

Appeal No. Service Tax Appeal No. 50810 of 2019

F.O. NO. Final Order No. 50397/2025

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