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TMI Blog2010 (10) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... entation of software packages, supply chain management solutions, development of PC based tools; embedded software and networking solutions for automotive companies development of business intelligence tools; chip design, verification and testing for semiconductor companies; SAP consulting, risk management and compliance services; transaction processing; technology based and knowledge based services. These services are delivered from KPIT offshore delivery centers in Pune and Bangalore and from onsite locations at customer's premises across the world. The appellant had its foreign subsidiaries in USA, UK and Middle East and these subsidiaries function as their marketing offices as well as provide administrative support to the appellant herein and by virtue of agreements with such foreign subsidiaries, the appellant passed an amount of 12% of the sale value for rendering selling and marketing services. It is the Revenue's case that the appellant has not discharged the service tax liability on these amounts paid by them under the category of 'Business Auxiliary Services' on the ground that the service tax liability arises as a recipient of taxable services during the period from July ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 2(1)(d)(iv) of the Service Tax Rules, 1994, the appellant is liable to pay service tax liability as a recipient of services under the category of 'business auxiliary service', it is his submission that the service tax liability on the appellant, if any, as recipient of services would arise from 18-4-2006 as held by the Hon'ble High Court of Mumbai in the case of Indian National Shipowners Association v. Union of India [2008-TIOL-633-HC MUM-S.T. = 2009 (13) S.T.R. 235 (Bom.)] which was affirmed by the Hon'ble Supreme Court as reported in 2010 (17) S.T.R. J57 (S.C.). It is also submitted that the Hon'ble High Court of Karnataka in the cases of - (i) CST v. SKF India Ltd. [2010 (18) S.T.R. 388 (Kar.)]; (ii) CST v. Araco Corporation [2010 (19) S.T.R. 169 (Kar.)]; (iii) CST v. Toyoda Iron Works Co. Ltd. [2010 (19) S.T.R. 802 (Kar.)]; and (iv) CST v. Bharat Electronics Ltd. [CEA No. 13/2007 dated 12-8-2010] [2010 (20) S.T.R. 307 (Kar.)] followed the judgment of the Hon'ble High Court of Mumbai in Indian National Shipowners Association case (supra) and held that service tax liability under Section 66A onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des and perused the records. In appeal No. 360/2008, the appellant herein is not contesting the service tax liability of Rs. 12,97,960/- for the period 7/2004 to 6/2006. Since the said service tax liability is not contested by the appellants, the impugned order to the extent it upholds the service tax liability of Rs. 12,97,960/- is upheld and the appeal filed by the appellant to that extent is rejected. 6.1 As regards the service tax liability of Rs. 4,94,57,132/- for the period 7/2003 to 3/2006, we find that the entire demand has arisen on the ground that the appellant as recipient of the services rendered by non-resident Indian, is liable for service tax under Rule 2(1)(d)(iv) of the Service Tax Rules, 1994. The finding of the adjudicating authority as regards the fixing of liability is recorded in Paragraph 35 of the impugned order which we reproduce : "35. I do not agree with their contention as to the service recipient becoming liable to pay service tax as per Rule 2(1)(d)(iv) of Service Tax Rules, 1994 and the case law cited thereof that there was no machinery provision and the Finance Act, 1994 is not applicable to foreign service provider and not even to the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty by recipient of services, in reverse charge mechanism will be applicable with effect from 18-4-2006. We find that the issue has been settled by the Hon'ble Supreme Court and also by various judgments of the Hon'ble High Court of Karnataka as has been indicated herein above. We find that the contentions raised by the learned Jt. CDR would not carry the revenue's case any further inasmuch as the very same provisions of Section 66A of the Finance Act, 1994, were considered by the Hon'ble High Court of Mumbai in the case of Indian National Shipowners Association (supra). The CBEC circular relied upon by the learned Jt. CDR also would not carry the case of the revenue any further, as for the directions on levy of service tax on taxable service received in India from 1-1-2005. We find that the judgment of the Hon'ble High Court of Mumbai is followed by the jurisdictional High Courts. Further we find that Hon'ble High Court had in judgment considered the Notification No. 36/2004 and had also considered the provisions of Rule 2(1)(d)(iv) of Service Tax Rules, 1994. 7. In view of this, we are of the considered view that the judgment of the Hon'ble High Court of Mumbai in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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