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2009 (1) TMI 41 - AT - Service TaxRespondents paid consultancy fee for technical services to a foreign based company - with effect from 1.1.2005, under Notification No. 36/2004, recipient of such service e could not be held liable for paying service tax prior to 1-1-2005 - held that as a recipient of the consulting engineer service from outside India, the appellant was not liable to pay service tax prior to 1-1-2005 - appeal filed by the Revenue is rejected
Issues:
Interpretation of service tax rules regarding taxable services provided by non-residents without an office in India. Analysis: The appeal was filed against an order-in-appeal dated 31st July, 2006. The respondents had paid consultancy fees for technical services to a company in Hong Kong without an office in India. The issue in question had already been settled by the Larger Bench of the Tribunal in the Hindustan Zinc Ltd. case. The Tribunal held that taxable services provided by non-residents without an office in India were specified as taxable services with effect from 1.1.2005 under Notification No. 36/2004. It was concluded that recipients of such services could not be held liable for paying service tax before 1-1-2005, despite the amendment in Rule 2(1) of the Service Tax Rules under Notification No. 12/2004. The Tribunal concurred with the view expressed in previous cases and held that as a recipient of consulting engineer services from outside India, the appellant was not liable to pay service tax before 1-1-2005. Consequently, the appeal filed by the Revenue was rejected based on the decision of the Larger Bench of the Tribunal. In summary, the judgment clarified the tax liability of recipients of services provided by non-residents without an office in India. The decision was based on the interpretation of relevant service tax rules and previous rulings, ultimately leading to the rejection of the Revenue's appeal. The Tribunal's analysis aligned with the legal position established in earlier cases, providing clarity on the issue at hand.
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