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2015 (11) TMI 611 - AT - Service TaxDemand of service tax - Consulting Engineering Service - Held that - Karnataka High Court while upholding the order of the Tribunal, dismissed the Revenue s appeal in the appellant s own case reported as Commissioner of Service Tax, Bangalore Vs. Denso Corporation - 2012 (8) TMI 686 - KARNATAKA HIGH COURT . - there is no provision to demand service tax during the period 19.5.1988 to 15.8.2002 on a foreign service provider as Section 66A was inserted to the Finance Act, 1994 only with effect from 18.4.2006. Accordingly, the impugned order is set aside - Decided in favour of assessee.
Issues:
Demand of service tax on overseas service provider for the period 19.5.1998 to 15.8.2002 under Consulting Engineering Service. Analysis: The appeal was filed against the order passed by the Commissioner of Central Excise (Appeals), Coimbatore, confirming the demand of service tax provided by the overseas service provider. The appellant, a foreign service provider, was involved in supplying technical information, granting rights, and testing and valuation in Japan. The Commissioner (Appeals) reduced the demand and penalty in the impugned order. Upon reviewing the impugned order and hearing both parties, it was noted that the case pertained to the demand of service tax on the overseas service provider for the specified period under Consulting Engineering Service. Reference was made to a judgment by the Hon'ble Karnataka High Court in a similar case involving the appellant, where it was held that a foreign service provider is not liable to pay service tax under the Finance Act, 1994. The court's decision was based on the fact that the Finance Act, 1994 was not applicable to a foreign company providing services, and the liability was imposed on the recipient of the service through Section 66A, effective from 18.4.2006. In line with the judgment of the Hon'ble High Court of Karnataka, it was concluded that there was no provision to demand service tax from a foreign service provider for the specified period as Section 66A of the Finance Act, 1994, which imposed such liability on the recipient of the service, was inserted only with effect from 18.4.2006. Consequently, the impugned order was set aside, and the appeal was allowed.
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