2015 (8) TMI 401 - AT - Service Tax

Demand of service tax - Reverse charge mechanism - Import of taxable service - Held that - issue involved in this case is no longer res integra in the light of the judgement of the Supreme Court in the case of Indian National Shipowners Assn Vs. Union of India 2008 (12) TMI 41 - BOMBAY HIGH COURT , wherein it has been held that the reverse the mechanism became operative only from 18.04.2006 when Section 66A was introduced in the finance act 1994. As the period involved in this case is prior to 18.04.2006, Revenues appeal is not sustainable - Decided against Revenue.

Summary

Issues:
Appeal against Order-in-Appeal confirming demand under reverse charge mechanism for imported taxable service during 2002-03; Interpretation of Rule 2(1)(d) of Service Tax Rules, 1994; Applicability of reverse charge mechanism pre and post 18.04.2006.

Analysis:
The appeal was filed challenging the Order-in-Appeal dated 30.06.2009, which had set aside the primary adjudicatory authority's decision confirming a demand of Rs. 2,34,979 under reverse charge mechanism for imported taxable service during the period 2002-03. The Revenue argued that as per Rule 2(1)(d) of Service Tax Rules, 1994, the recipient of service was liable to pay service tax.

Upon hearing the case, it was noted that there was no representation from the respondents. The Tribunal considered the Revenue's contention and referred to the judgment of the Supreme Court in the case of Indian National Shipowners Assn Vs. Union of India [2009 (13) STR 235 (Bomb) / 2010 (17) STR 557 (SC)], which clarified that the reverse charge mechanism became effective only from 18.04.2006 with the introduction of Section 66A in the Finance Act 1994. Since the period in question in this case was prior to 18.04.2006, the Tribunal held that the Revenue's appeal was not sustainable and subsequently dismissed it.