2011 (11) TMI 173 - AT - Service Tax

Refund claim assessee paid service tax as recipient of the services of overseas agencies period involved 16.06.2005 to 31.03.2006 Held that - Board vide Circular No. F. No. 276/8/2009-CX 8A dated 26.09.2011 advised the field formation that in such a situation the service tax liability on recipient in India would arise only w.e.f. 18.04.2006. Since the refund claim related to period prior to the same hence, order granting refund is confirmed.- Decided in favor of assessee.

Summary

Issues:
Service tax liability of recipient for services from overseas provider prior to 18.04.2006.

The judgment deals with an appeal filed by the department against a manufacturer of readymade garments who had paid service tax as a recipient of services from Overseas Agencies for the period 16.06.2005 to 31.03.2006. The original authority rejected the manufacturer's refund claim, but the Commissioner (Appeals) set aside the order, noting that the tax liability on the recipient of services from overseas providers would arise only from 18.04.2006. The department's appeal was based on the grounds reiterated by the learned DR, but the Board, through a circular, clarified that the service tax liability on the recipient in India would indeed arise only from 18.04.2006 following the dismissal of the review petition by the Hon'ble Supreme Court.

The Tribunal, in line with the settled understanding that the service tax liability on the recipient of services from overseas providers would be effective only from 18.04.2006, upheld the decision of the Commissioner (Appeals) and rejected the department's appeal. Since the refund claim related to a period prior to the specified date, the Tribunal found no valid reason to interfere with the order of the Commissioner (Appeals). Therefore, the appeal of the department was dismissed, and the decision was pronounced and dictated in open court.