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2009 (9) TMI 671 - AT - Service TaxServices received from outside India- Business Auxiliary Services- The assessees herein are manufacturers of cotton yarn of various varieties and polyester cottons yarn of various varieties, they export goods to various countries, they paid commission during the period Oct.2004 to Sept.,2005 for this purpose. Thus the department held that assessee were receiving taxable service under the category of Business Auxiliary Service . In the light of the decision of Indian National Shipowners Association v. Union of India 2009 -TMI - 32013 - HIGH COURT OF BOMBAY, held that set aside the impugned order and allow the appeal.
Issues:
Service tax liability on service received from outside India before 18-4-2006. Analysis: The case involves assessees who are manufacturers of cotton yarn and polyester cotton blended yarn, exporting goods with the help of a commission agent in Spain. The issue at hand is the imposition of service tax on the overseas sales commission received by the commission agent. The Assistant Commissioner and the Commissioner (Appeals) upheld the demand for service tax, which is being challenged in this appeal. The Vice President, after hearing both sides, refers to the judgment of the Hon'ble Bombay High Court in Indian National Shipowners Association v. Union of India and the Hon'ble Delhi High Court in Unitech Ltd. v. CST, which establish that the liability to service tax on services received from outside India is applicable only from 18-4-2006. The Vice President also mentions the Tribunal's decision in Fifth Avenue v. CST (Chennai - CESTAT) where this principle was followed. Additionally, the Vice President highlights the distinction made by the Tribunal in the case of Anant Spinning Mills v. CCE regarding the judgment of the Larger Bench of the Tribunal in Hindustan Zinc Ltd. v. CCE, which was relied upon by the revenue. Based on the legal precedents and decisions cited, the Vice President sets aside the impugned order and allows the appeal of the assessees. This means that the service tax liability on the overseas sales commission received by the commission agent in Spain before 18-4-2006 is not applicable, as per the established legal principles and judgments referenced in the analysis.
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