Order Date – 24 January 2024

Parties: Aban Offshore Ltd. Vs Commissioner of GST & Central Excise

Facts –

• The Appellant, Aban Offshore Ltd, is engaged in providing offshore drilling services to oil majors and services of various service providers located outside India, to provide engineering consultancy, management consultancy, testing & inspection and banking service.
• A show cause notice was issued by DGCEI demanding service tax observing that the appellant has neither obtained service tax registration for receiving the subject services nor paid service tax on reverse charge basis in terms of Rule 2(1)(d)(iv) of Service Tax Rules, 1994.

Issue –

• Whether the appellant is liable to pay service tax on services provided outside India?

Order –

• The Tribunal observed that the Central Government vide Notification No. 3/2004-ST dated 11.3.2004 have appointed ADG (DGCEI) as a Central Excise Officer for whole of India and have vested in him all the powers that are exercisable by the Central Excise officers and is hence fully competent to issue the present Show Cause Notice under consideration.
• The taxable services provided from outside India by Barclays UK, who advices the issuing company (Appellant) on all aspects of the FCCB issuance, is received by the Appellant who is a juristic person situated in India, which constitutes the taxable event. This service is exigible to tax under the Reverse Charge Mechanism as per section 66A(1) of FA 1994.
• The Appellants action cannot be said to be caused by a bonafide dispute, on technical grounds because the sections are clear and the appellant is also one who has been availing of legal and consultative advice in various matters and have not shown that they were in receipt of contrary advice not to pay tax or sought clarification from the department. Hence we do not find any demerit in the impugned order covering the extended period of demand and imposition of penalty.
• The impugned order is hence upheld. The appeals are disposed off accordingly.