2009 (10) TMI 265 - AT - Service Tax

Charges of service tax received outside India- M/s. APC had failed to pay Service Tax on the payments made for obtaining the technical know-how from M/s. American Power Conversion, West Kingston, Rhode Island, USA. The services so provided by the foreign company in the engineering discipline related to the advice, consultancy and technical assistance which appeared to be classifiable under the category of Consulting Engineer Services. M/s. APC appeared to be liable to pay Service Tax under the aforementioned category in terms of rule 2(1)(d)(iv) of Service Tax Rules, 1994 from 16-8-2002 to 9-9-2004. In the light of the decision of Indian National Shipowners Association v. UOI 2009 -TMI - 32013 - HIGH COURT OF BOMBAY, held that appeal filed by assessee allowed as the concept of reverse charge introduced from 18.04.2006.

Summary

Issues:
1. Liability of the appellant to pay Service Tax on services received from a foreign company.
2. Classification of services under Consulting Engineer Services and Intellectual Property Services.
3. Validity of demand for Service Tax, interest, and penalties.

Analysis:
1. The case involved appeals against an Order-in-Original regarding the liability of the appellant, a manufacturer of Uninterrupted Power Supply, to pay Service Tax on services received from a foreign company for technical know-how. The appellant was found liable to pay Service Tax under Consulting Engineer Services and Intellectual Property Services categories for specific periods. The Adjudicating Authority confirmed the demand for Service Tax, interest, and penalties.

2. The Adjudicating Authority's order was challenged on the grounds that the appellant was not liable to pay Service Tax as a recipient of services during the relevant period. The appellant argued that based on High Court decisions, the liability to discharge Service Tax as a recipient of services arose only from 18-4-2006, not for the period in question. The issue of classification of services under Consulting Engineer Services for a specific period was also contested by the Revenue.

3. After considering submissions and precedents, the Tribunal found that the liability of the appellant to pay Service Tax as a recipient of services arose only from 18-4-2006, as per High Court decisions. Therefore, the demand for Service Tax, interest, and penalties for the period before 18-4-2006 was unsustainable. The Tribunal allowed the appeal filed by the assessee, rejected the revenue's appeal, and disposed of the cross-objection in support of the impugned order.

This detailed analysis highlights the key legal issues, arguments presented, and the Tribunal's decision based on relevant legal principles and precedents, providing a comprehensive understanding of the judgment.