2025-VIL-2184-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax – Providing of services from outside India – Tax liability – Appellant, a Company registered under laws of USA, entered into License Agreement with Petroleum Companies in India, vide which, it granted non-exclusive right to use licensed technology, which was patented outside India, to Petroleum Companies in India – Petroleum Companies in India had agreed to pay a fixed consideration at pre-determined intervals – Department issued show cause notice to Appellant by proposing demand of Service Tax on consideration received for Intellectual Property Rights (IPR) services – Adjudicating Authority confirmed demand as proposed in show cause notice – Whether Appellant is liable to pay Service Tax under category of IPR services – HELD – It is not dispute that patents and IPR are registered in USA. Terms of agreement indicate that payment for such transfers is to be made in USD. Neither show cause notice nor impugned order established that liaison office in India had provided services on their own to Indian Petroleum companies. Services were rendered by Appellant from USA, a place outside India. Services were provided entirely from outside of India and no part of services were ever performed in India. Appellant did not have any establishment, office, employee or any assets in India where the disputed services were provided. Services provided beyond territorial waters of India are not liable to service tax, as provisions of Service Tax have not been extended to such areas to a service recipient in India. Presence of a liaison office in India would not have made any difference. Appellant cannot be obligated to discharge Service Tax on services provided by it from outside India. Impugned order cannot be sustained – Appeals allowed
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