2008 (12) TMI 60 - AT - Service Tax

Technical Consultancy Service received from the overseas parties - Technical Consultancy Service , came into service tax net w.e.f. 16.7.01 - services have been rendered and received prior to introduction of service tax on 16.7.01 and the payment made for the said services on subsequent date - held that in respect of such services, the payment made by the recipient of the services on subsequent date cannot be taxed appeal of assessee is allowed

Summary

Issues:
1. Taxability of services received before the introduction of service tax.
2. Liability of service tax on payments made for services received from overseas parties without an office in India.

Analysis:
1. The case involved the appellant receiving 'Technical Consultancy Services' from overseas parties before the introduction of service tax on such services. A part payment was made for these services after the introduction of the service tax. The appellant argued that since the services were rendered and received before the service tax introduction, the subsequent payment should not be taxed. The Tribunal agreed with the appellant, holding that for services rendered before the levy of service tax, payments made after the introduction of the tax cannot be taxed.

2. The appellant also contended that services received from overseas parties without an office in India should not be liable to pay service tax, citing a precedent set by the Tribunal in the case of Hindustan Zinc Ltd. The Tribunal considered this argument and upheld the decision from the aforementioned case. It was held that for services received from overseas parties without an office in India, the recipient is not liable to pay service tax. Therefore, in this case, the Tribunal ruled in favor of the appellant, allowing the appeal and providing consequential relief.