2014 (3) TMI 1065 - AT - Service Tax

Demand alongwith interest and penalty - reverse charge mechanism - appellant remitted commission to overseas commission agents for facilitating its export sales during July 9, 2004 to March 31, 2006 - Held that - the Supreme Court in 2009 (12) TMI 850 - SUPREME COURT OF INDIA has dismissd the judgment of the High Court in the case of Indian National Shipowners Association vs. UOI 2008 (12) TMI 41 - BOMBAY HIGH COURT and has confirmed the position that a service recipient in India is liable to remit service tax for taxable services received from abroad only from 18.4.2006, after introduction of Section 66A in the Finance Act, 1994. Therefore, in view of the same the tax, interest and penal liability assessed by the primary authority and confirmed in the impugned Order-in-Appeal by the Commissioner (Appeals), cannot be sustained. - Decided in favour of appellant

Summary

Issues: Change of name application, early hearing of appeal, liability under reverse charge mechanism, applicability of service tax, quashing of adjudication order

The judgment addresses an application seeking a change of name of the appellant to M/s DSM Sinochem Pharmaceuticals India Private Limited. The President directs the alteration of the appellant's name as requested. Additionally, the application for early hearing of the appeal is granted. The appeal challenges the appellate order of the Commissioner (Appeals) dated 12.2.2009, which upheld the adjudication order passed by the Assistant Commissioner, Central Excise Division, Phagawara, Punjab. The adjudication order imposed a liability of &8377; 3,94,020/-, along with interest and penalties under the reverse charge mechanism, based on commission payments made to overseas agents for export sales between July 9, 2004, and March 31, 2006.

The judgment refers to the Supreme Court's ruling in Indian National Shipowners Association vs. UOI, which established that a service recipient in India is liable to pay service tax for services received from abroad only from 18.4.2006, following the introduction of Section 66A in the Finance Act, 1994. In light of this legal precedent, the tax, interest, and penalty imposed by the primary authority and confirmed by the Commissioner (Appeals) are deemed unsustainable. The Revenue's legal representative does not contest this position. Consequently, the appeal is allowed, and the impugned order confirming the adjudication order is set aside. No costs are awarded in this matter.

In summary, the judgment primarily deals with a change of name application, the appeal against an adjudication order regarding liability under the reverse charge mechanism, the applicability of service tax based on legal precedence, and the subsequent quashing of the adjudication order due to the change in legal interpretation. The decision provides clarity on the tax liability for services received from abroad and ensures the appropriate application of the law in the case at hand.