2015 (8) TMI 449 - AT - Service Tax

Intellectual Property Services - According to the Revenue, the Intellectual Property Services was brought into the service tax net with effect from 07.9.2004 and the appellant is liable to pay service tax as recipient in India - Held that - Issue is no more res-integra and settled by the decision in the case of Indian National Shipowners Association vs. UOI - 2008 (12) TMI 41 - BOMBAY HIGH COURT , which is upheld by the Hon ble Supreme Court as reported in 2009 (12) TMI 850 - SUPREME COURT OF INDIA . The learned advocate also relied upon the decision of the Hon ble Gujarat High Court in the case of Commissioner of Service Tax vs. Quintiles Data Processing Centre (I) Pvt. Limited - 2011 (4) TMI 585 - GUJARAT HIGH COURT . It has been held that charging Section i.e. Section 66A of Finance Act, 1994 is introduced with effect from 18.04.2006 in respect of the services received from the foreign. In the present case, the dispute relates to the period October 2004 to September 2005 - Decided in favour of assessee.

Issues:
1. Liability of the appellant to pay service tax on Intellectual Property Services received from a foreign party.
2. Applicability of charging Section 66A of Finance Act, 1994 to services received from abroad.
3. Interpretation of relevant legal precedents - Indian National Shipowners Association case, Commissioner of Service Tax vs. Quintiles Data Processing Centre case.

Analysis:
1. The case involved the liability of the appellant to pay service tax on Intellectual Property Services received from a foreign party, M/s. Inductotherm Industries Inc., USA. The Revenue argued that the services were brought into the service tax net from September 7, 2004, making the appellant liable to pay service tax as the recipient in India. However, the Tribunal found that the issue had already been settled by legal precedents. The Tribunal noted that the dispute pertained to the period between October 2004 and September 2005, and relied on the decision in the Indian National Shipowners Association case, which was upheld by the Supreme Court. The Tribunal concluded that the appellant was not liable to pay service tax on the Intellectual Property Services based on the cited legal precedents.

2. The Tribunal considered the applicability of charging Section 66A of the Finance Act, 1994 to services received from abroad. It was noted that Section 66A was introduced with effect from April 18, 2006, concerning services received from foreign entities. In this case, the services in question were received between October 2004 and September 2005, falling outside the scope of Section 66A. The Tribunal referenced the decision of the Hon'ble Gujarat High Court in the Commissioner of Service Tax vs. Quintiles Data Processing Centre case to support this interpretation. Consequently, the Tribunal held that the charging Section 66A was not applicable to the services received by the appellant from the foreign party during the relevant period.

3. The Tribunal's decision was influenced by the interpretation of relevant legal precedents, specifically the Indian National Shipowners Association case and the Commissioner of Service Tax vs. Quintiles Data Processing Centre case. These cases provided guidance on the liability of recipients for service tax on services received from foreign entities and the applicability of charging sections within the Finance Act, 1994. By relying on these precedents, the Tribunal set aside the impugned order and allowed the appeal filed by the appellant, thereby resolving the issue of service tax liability on the Intellectual Property Services received during the specified period.

This comprehensive analysis of the judgment highlights the key issues addressed by the Tribunal, the legal precedents considered, and the ultimate decision reached in favor of the appellant.

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