2012 (12) TMI 273 - AT - Service Tax

Reverse charge on import of services Assessee has received various services from territory outside India who have no office in India - The period involved in this case is 01.04.99 to 31.03.04 Revenue contended that assessee not paying the Service Tax on the services, falling under the category of Consultancy Engineering Service as specified in Sec. 65(31), received by them Held that - Since the period involved which is prior to 18.04.2006, i.e. the date of insertion of Section 66A of the Finance Act, 1994. Before enactment of Section 66A it is apparent that there was no authority vested by law in the Respondents to levy service tax on a person who is resident in India, but who receives services outside India as held in case of INDIAN NATIONAL SHIPOWNERS ASS.& ORS. (2010 (12) TMI 12 - SUPREME COURT OF INDIA). Hence impugned Orders are not sustainable in law. Therefore, the Orders are set aside and the Appeals of assessee are allowed.

Summary

Issues:
- Appellants challenging Orders-in-Original dated 14.11.2006, 11.03.2008, 18.03.2008, 24.03.2008, 26.03.2008, 27.03.2008, 28.03.2008, 31.03.2008 passed by Commissioner of Central Excise & Service Tax, Jamshedpur.
- Appellants receiving services from foreign service providers without paying Service Tax.
- Dispute regarding liability to pay Service Tax on services received from abroad prior to 18.04.2006.
- Appellants relying on various court decisions to support their contention.

Analysis:

The Appellants filed Appeals against multiple Orders-in-Original passed by the Commissioner of Central Excise & Service Tax, Jamshedpur, challenging the demand for Service Tax on services received from foreign service providers. The Appellants argued that during the period in question, recipients were not required to pay Service Tax for services provided by foreign consultants. They cited several court decisions to support their claim, emphasizing that prior to 18.04.2006, the recipient of services from abroad was not liable to pay Service Tax.

The Tribunal noted that multiple High Courts and Tribunals, affirmed by the Supreme Court, had established that prior to 18.04.2006, recipients of services from abroad were not obligated to pay Service Tax. Citing the Bombay High Court's decision, the Tribunal highlighted that the legal authority to levy Service Tax on Indian recipients of services from non-residents was granted only after the enactment of Section 66A in 2006. The Tribunal also referred to a previous case involving JCB India Ltd., where the Supreme Court affirmed that tax liability is determined by statutory provisions and cannot be shifted based on private agreements.

Consequently, the Tribunal found that the Orders-in-Original were not legally sustainable. Therefore, the Orders were set aside, and the Appeals filed by the Appellants were allowed.