2007 (10) TMI 263 - AT - Service Tax

Impugned demand relates to the period April 2000 to July 2002 in respect of Consulting Engineer Services received by the appellants from the foreign supplier- appellants submission that only from 16-8-02 under the amended law the service recipients were required to pay Service tax and the appellants have been paying the tax due on such services from that date is acceptable - impugned order demanding tax from the appellants is bad in law and cannot sustain

Summary

Issues:
1. Liability to pay service tax on consulting engineer services received from a foreign supplier prior to August 2002.
2. Applicability of relevant case laws to the present case.
3. Validity of the impugned order demanding tax.
4. Decision on the appeal filed by M/s. MCC PTA India Corpn. Pvt. Ltd.
5. Dismissal of the appeal filed by the Department for enhancement of penalty.

Analysis:
1. The main issue in this case was the liability to pay service tax on consulting engineer services received by the appellants from a foreign supplier prior to August 2002. The advocate for the appellants argued that there was no legal obligation to pay any tax before August 2002, citing relevant Tribunal decisions in support of this contention.

2. The Tribunal examined the case laws presented by the advocate and found them to be applicable to the appellants' situation. In the absence of a legal provision imposing the obligation to pay service tax on services received before August 2002, the impugned order demanding tax from the appellants was deemed legally unsustainable.

3. Consequently, the Tribunal set aside the impugned order and allowed the appeal filed by M/s. MCC PTA India Corpn. Pvt. Ltd. The stay petition was also disposed of in light of this decision.

4. As a result of setting aside the impugned order, the appeal filed by the Department for enhancement of penalty was dismissed by the Tribunal.

5. The judgment was dictated and pronounced in open court, with the decision favoring the appellants and dismissing the Department's appeal for penalty enhancement. The Tribunal's decision was based on the lack of legal obligation to pay service tax on the services received by the appellants before August 2002, as established by relevant case laws.