2022 (11) TMI 749 - AT - Service Tax

Recovery of service tax - Consulting Engineer service received by it from an overseas Consulting Engineer - demand alongwith interest and penalty - HELD THAT - Revenue s case is that the Commissioner (Appeals) has greatly erred in following judicial discipline and should have disobeyed the order of Larger Bench of this Tribunal which was upheld by the Supreme Court. According to the Revenue, since department was considering whether a review petition should be filed against the dismissal of SLP by the Supreme Court, the Commissioner (Appeals) should not have followed the decision of this Tribunal and Supreme Court. Needless to say that such a ground cannot be the basis for allowing any appeal by the Revenue. The appeal filed by the Revenue accordingly deserves to be dismissed. The appeal filed by the Revenue is dismissed.

Issues:
1. Appeal against order-in-appeal passed by the Commissioner of Central Excise (Appeals), Jaipur.
2. Alleged evasion of service tax by the respondent.
3. Interpretation of tax liability for service received from an overseas Consulting Engineer.
4. Application of Notification No. 12/2004 on service tax liability.
5. Dismissal of appeal by Revenue based on the decision of the Larger Bench of the Tribunal.
6. Consideration of filing a review petition/application against the dismissal of SLP by the Supreme Court.

Analysis:

1. The appeal was filed by the Revenue against the order-in-appeal passed by the Commissioner of Central Excise (Appeals), Jaipur, setting aside the order-in-original passed by the Assistant Commissioner of Central Excise, Ajmer. The respondent, a manufacturer of white Portland cement, was alleged to have evaded payment of service tax by suppressing the taxable value in respect of Consulting Engineer services received from an overseas entity. The Assistant Commissioner confirmed the demand, but the Commissioner (Appeals) relied on a decision of the Larger Bench of the Tribunal in a similar case to allow the appeal of the respondent.

2. The main issue revolved around the interpretation of tax liability concerning the service received by the respondent from an overseas Consulting Engineer. The Commissioner (Appeals) based the decision on the Tribunal's ruling that services provided by a non-resident entity without an office in India were not liable for service tax under Notification No. 12/2004. The Commissioner (Appeals) concluded that the respondent was not liable to pay service tax for the period before 01.01.2005.

3. The Revenue, despite the Larger Bench's decision in favor of the respondent and the Supreme Court's dismissal of the SLP filed by the Revenue, contended that a review petition/application was under consideration. The Revenue argued that the Commissioner (Appeals) erred in following the Tribunal and Supreme Court's decisions, questioning the need for a review petition. However, the Tribunal held that the consideration of a review petition could not be the basis for allowing the Revenue's appeal, ultimately dismissing the Revenue's appeal and upholding the impugned order.

In conclusion, the Tribunal dismissed the Revenue's appeal and upheld the decision of the Commissioner (Appeals) in favor of the respondent, emphasizing that the pendency of a review petition could not undermine the binding nature of the Tribunal and Supreme Court's decisions.

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