2008 (3) TMI 266 - AT - Service Tax

Assessee s submission is that the services on the recipient of the engineering services are taxable from 1-1-2006 and not for the earlier period - Without going into the merits of the case, we find that the issue requires deeper scrutiny and applicant has not made out a prima facie case for complete waiver of the confirmed amount of Service tax

Summary

Issues involved: Taxability of services received from foreign firms in the field of engineering, compliance with provisions of Section 35F of the Central Excise Act, 1944.

Analysis:

1. Compliance with Section 35F of the Central Excise Act, 1944:
The appeal was dismissed by the ld. Commissioner (Appeals) due to non-compliance with the provisions of Section 35F of the Central Excise Act, 1944. This non-compliance led to the stay application being filed against the confirmation of Service tax demand and penalty amounting to Rs. 32,10,267.

2. Taxability of services received from foreign firms:
The main issue in this case revolved around the taxability of services received by the appellants from foreign firms in the field of engineering. The revenue contended that the appellant company was liable to pay Service tax as a recipient of Consulting Engineering Services from foreign firms that did not have an office in India. The argument was based on the premise that the services were taxable from 1-1-2006 onwards.

3. Judicial scrutiny and decision:
The Tribunal noted the arguments presented by both sides, with the appellant's counsel referring to various case laws to support the claim that the services on the recipient of engineering services were taxable only from 1-1-2006. On the other hand, the SDR cited a decision by the High Court of Kerala, claiming that the issue was settled. The Tribunal found that the issue required deeper scrutiny and that the appellant had not established a prima facie case for a complete waiver of the confirmed Service tax amount. As a result, the Tribunal directed the appellant to deposit Rs. 5.00 lakhs towards the Service tax liability within four weeks and report compliance to the Commissioner (Appeals) by a specified date.

4. Disposition of the stay application and appeal:
Upon compliance with the directed deposit, the Commissioner (Appeals) would proceed to dispose of the appeal and pass a speaking order on the merits without requiring any further pre-deposit. The stay application and appeal were disposed of based on the terms outlined by the Tribunal, emphasizing the need for compliance with the directed deposit to move forward with the appeal process.