Order Date: 28 February 2023

Parties: M/s. Aban Infrastructure Pvt. Ltd. vs. The Commissioner of GST & Central Excise

Facts – 

• The Appellant, M/s. Aban Infrastructure Pvt. Ltd. is engaged in Management, Maintenance, and Repair services (MMR) and Renting of Immovable Property Services (RIP). They had undertaken repairs/maintenance of rig/drill ships and had raised invoices on their client.
• They had not discharged service tax on the amounts received for carrying out repair works for the reason that the services have been provided in the non-designated areas and therefore the provisions of Chapter V of the Finance Act, 1994 do not apply.
• SCN was issued proposing to demand service tax on such amounts received by them, along with interest, and also for imposing the penalty.

Issue – 

• Whether the appellant is liable to pay service tax or not?

Orders – 

• The Tribunal observed that the demand is raised on the consideration received for repair works done by the appellant on the rig / drill ship. The Department has proceeded to analyse whether the activity would fall under export of services or not. The defence taken by the appellant is that the services were rendered in a non-designated area and therefore they are not liable to service tax.
• The provisions of Chapter V of Finance Act, 1994 applies only to designated areas in the continental shelf and exclusive economic zone of India. The repair works were performed in the non-designated area of continental shelfs and exclusive economic zone hence there is no question of payment of service tax in respect of the maintenance and repair works carried out by the appellant on rig/drill ship. 
• Hence, it was held that the demand for service tax cannot sustain. The impugned order is set aside. The appeal is allowed with consequential relief, if any, as per law.