2021 (11) TMI 831 - AT - Service Tax

Recovery of service tax - demand pertaining to the period prior to 18.4.2006 and the period after such date - IPR Services - reverse charge mechanism - HELD THAT - As a recipient of taxable service, the appellant was not liable to pay service tax under reverse charge mechanism prior to the period 18.4.2016 as per the judgment of Hon ble Bombay High Court in the case of INDIAN NATIONAL SHIPOWNERS ASSOCIATION VERSUS UNION OF INDIA 2008 (12) TMI 41 - BOMBAY HIGH COURT , which was subsequently been affirmed by the Hon ble Supreme Court, UNION OF INDIA VERSUS INDIAN NATIONAL SHIPOWNERS ASSOCIATION 2009 (12) TMI 850 - SC ORDER . Considering the factual matrix, the original authority has not only dropped the demand for the period prior to 18.4.2006 but also dropped the proposed demand towards IPR service received by the respondent after such effective date, holding that, such service was not liable for payment of service tax prior to the period 1.7.2012. There are no infirmity in the impugned order passed by the learned adjudicating authority - Revenue dismissed.

Summary

Issues:
- Appeal against the order passed by the Commissioner of Central GST, Bangalore
- Service tax demand prior to 18.4.2006 and after that date
- Liability of the appellant to pay service tax under reverse charge mechanism
- Interpretation of judgments by the Hon'ble Bombay High Court and the Hon'ble Supreme Court

Analysis:
The appeal was filed by the Revenue against the order passed by the Commissioner of Central GST, Bangalore. The Tribunal had earlier remanded the matter to quantify the service tax demand for the period before and after 18.4.2006. The original authority, in the de novo adjudication proceedings, dropped the demand proposed for recovery from the respondent. The adjudicating authority, in support of dropping the proposed demands, referred to the charge of service tax on services received from outside India and concluded that the services other than technical know-how service under Intellectual Property Right Service rendered by the respondent before 18.04.2006 were not liable for service tax. The Tribunal found that as a recipient of taxable service, the appellant was not liable to pay service tax under the reverse charge mechanism before 18.4.2016, based on judgments by the Hon'ble Bombay High Court and the Hon'ble Supreme Court. The original authority dropped the demand for the period before 18.4.2006 and also the proposed demand towards IPR service received after 1.7.2012, holding that such service was not liable for service tax.

Upon careful examination of the case records, the Tribunal found no infirmity in the impugned order passed by the adjudicating authority. Consequently, the Tribunal concluded that there was no merit in the appeal filed by the Revenue against the impugned order and dismissed the appeal. The order was pronounced and dictated in the open court on 12.11.2021.