2005 (12) TMI 573 - AT - Service Tax

Summary

Issues:
1. Liability of service tax on management consultancy services provided by M/s. Siemens AG, Germany to M/s. Bharat Heavy Electricals Limited.
2. Applicability of service tax on services provided before the introduction of management consultancy services in the service tax net.

Analysis:
1. The appeal concerned the liability of service tax on management consultancy services provided by M/s. Siemens AG, Germany to M/s. Bharat Heavy Electricals Limited. The Revenue contended that M/s. Siemens AG, Germany did not pay the service tax, while the respondents argued that the services were provided before management consultancy services came under the service tax net. The respondents presented invoices and a letter confirming payment to establish that the services were provided before the service tax applicability date. The Tribunal noted that management consultancy services became taxable from 16-10-1998 and the services in question were provided in July 1998. As per the evidence presented, the respondents had paid for the services before the service tax imposition, making them not liable for any service tax.

2. The second issue addressed the applicability of service tax on services provided before management consultancy services were included in the service tax net. The Tribunal acknowledged that services before 16-10-1998 were not subject to service tax under the prevailing regulations. The respondents successfully demonstrated that the services were rendered between 15th to 19th July 1998, predating the introduction of service tax on management consultancy services. The Tribunal found no grounds provided by the department to contest this timeline. Consequently, the appeal filed by the Revenue was deemed unsustainable, leading to its rejection. The judgment highlighted the importance of aligning service provision dates with the regulatory framework to determine service tax liability accurately.