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2009 (5) TMI 373 - AT - Service TaxReverse Charges- Import of services- The appellant entered into an agreement with the foreign supplier for providing services such as access to the records of the parent company. In the light of the decision of Indian National Shipowners Association v. Union of India 2009 -TMI - 32747 - BOMBAY HIGH COURT, held that it is seen from the records that the services received by the appellant from their foreign company in Switzerland is for the period 2002-03 and 2003-04, while reverse charge introduced w.e.f. 18.4.2006, thus the impugned order set-aside and appeal is allowed.
Issues: Liability of Service Tax on services received from a foreign supplier prior to a specific date.
In the present case, the appellant entered into an agreement with a foreign supplier for various services and made payments towards service fees. The revenue contended that the amounts paid were liable for Service Tax under 'Business auxiliary service' and issued show-cause notices. The Joint Commissioner dropped the proceedings, but the Commissioner issued another show-cause notice for review. The Commissioner directed the appellant to show cause why the services could not be categorized under 'online information and data based access or retrieval service.' The Commissioner held the appellant liable for Service Tax, interest, and penalties. The appellant challenged this order. The appellant argued that the liability to discharge Service Tax arises from a specific date, relying on a judgment of the Bombay High Court in a similar case. The appellant emphasized that there was no dispute that the services were received before the specified date. The Joint Commissioner reiterated the findings of the impugned order. Upon considering the submissions and records, the Tribunal noted that the services were received by the appellant from the foreign company for the relevant periods, and payments were made accordingly. Referring to the Bombay High Court's decision on the reverse charge mechanism, the Tribunal found in favor of the appellant. Consequently, the Tribunal held that the impugned order was not sustainable, set it aside, and allowed the appeal with any consequential relief.
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