2009 (11) TMI 187 - AT - Service Tax

Services received outside India- Reverse charges- The assessee entered into a Joint Venture agreement with M/s. TRW Inc., USA, who will provide technical know-how to the assessee. The original authority confirmed the demand of service tax and imposed penalty under the category of Consulting Engineer on service rendered by the foreign company during the period 7-7-1997 to 23-2-2001. Commissioner (Appeals) modified the adjudication order insofar as allowing the deduction of cost drawing from the taxable value and reduced demand. Hence the assessee and the revenue filed the appeals. In the light of the decision of Indian National Shipowners Association v. Union of India 2009 -TMI - 32013 - HIGH COURT OF BOMBAY, in which held that the assessee received service from the foreign company prior to 18-4-2006 and the demand of tax and penalties are not sustainable, held that- impugned order is set aside and the appeal filed by the assessees is allowed. The appeal filed by the Revenue is dismissed.

Summary

The Appellate Tribunal CESTAT, CHENNAI decided in favor of the assessee in a case involving service tax on technical know-how fees and royalty paid to a foreign company. The tribunal ruled that the demand of tax and penalties were not sustainable as the service was received before 18-4-2006. The appeal by the assessee was allowed, and the appeal by the Revenue was dismissed.