2010 (9) TMI 28 - HC - Service Tax

Sharing of know how - demand of service tax within Technical Assistance and Consulting Engineering Services Held that - It could not be disputed that the service in question prior to 18.4.2006 received outside India will not attract the provisions of service tax.

Summary

Issues:
Levy of service tax on technical assistance and consulting engineering services.

Analysis:
The judgment deals with multiple appeals involving the common issue of the levy of service tax on technical assistance and consulting engineering services. In one of the appeals, the question raised was whether the services provided by the respondents fell under "Technical Assistance" and "Consulting Engineering Services." The case involved a show cause notice issued by the Department, alleging that a company was engaged in manufacturing with technical advice from another entity, which was deemed as a taxable service under the Finance Act, 1994. However, the Tribunal set aside the demand for service tax, ruling that the sharing of knowledge did not amount to the rendering of a service that would attract service tax. The Tribunal emphasized the need for the Revenue to prove that the entity providing the service was engaged as a consulting engineering service, which was not established in this case.

In another appeal, the issue of service tax liability was addressed concerning services provided by a non-resident and received in India before specific dates. The appellant relied on a circular by the Central Board of Excise and Customs, along with various judgments, to support the argument that service tax was not applicable to services received outside India before certain dates. The revenue did not contest the applicability of the circular and judgments cited by the appellant, acknowledging that service tax would not apply to services received outside India before a particular date. Consequently, the Court dismissed the appeals, as no substantial question of law arose in light of the undisputed legal position regarding the non-applicability of service tax to services received outside India before a specified date.

Overall, the judgment clarifies the interpretation and application of service tax laws concerning technical assistance, consulting engineering services, and the timing of service tax liability for services received outside India. The decision underscores the importance of establishing the nature of services provided to determine the applicability of service tax and highlights the significance of legal provisions and circulars in resolving tax liability disputes.