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TMI Blog2011 (4) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... vice from offshore service provider, not having office in India cannot be made liable to pay service tax only on the basis of Rule 2(1)(d) of Service Tax Rules as specific provision making the service recipient in India liable to pay service tax was introduced only with effect from 18.4.2006 - Decided in favor of assessee. - ST/487/2007 - ST/161/2011 - Dated:- 21-4-2011 - R M S Khandeparkar, Rakesh Kumar, JJ. For Appellant : Shri R K Hasija, Adv. For Respondent : Shri S N Singh, DR Per: Rakesh Kumar: The facts leading to this appeal are, in brief, as under: 1.1. The appellant are manufacturer of cement and cement clinker chargeable to Central Excise duty. They were also receiving taxable service services from various ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecipient were liable to pay service tax on the value of service of Rs.77,36,340/- received from the foreign service providers and which had not been paid by them. It is on this basis that the show cause notice dated 23.12.05 was issued for confirming service tax demand of Rs.5,67,143/- under Section 73(1) of Finance Act, 1994 alongwith interest on it under Section 75 and for imposing penalty under Section 76, 77 78 of the Finance Act, 1994. The show cause notice was adjudicated by the Additional Commissioner of Central Excise, Raipur vide Order-in-Original dated 29.11.06 by which (a) service tax demand of Rs.5,65,143/- was confirmed against the appellant alongwith interest and (b) penalty of Rs.200/- per day till the date of payment of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ablishment in India, the service recipient in India should be deemed to be the service provider and accordingly all the provision of chapter V of Finance Act, 1994 shall apply, that since there was no provision for retrospective operation of section 66A, the same could not be given retrospective effect, that Hon'ble Bombay High Court in the case of Indian National Shipowners Association vs. Union of India reported in 2009 (13) STR 235 (Bom.) held that as it is only with effect from 18.4.06, the section 66A was introduced, which made the person in India receiving taxable service from an offshore service provider, the person liable for paying service tax as a deemed service provider, during the period prior to 18.4.2006, the service recipient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a person in India from the foreign service provider not having office or establishment in India, the service recipient in India would be liable to pay service tax in terms of the provisions of Rule 2(1) (d) (iv) with effect from 1.1.2005, the date on which the Notification 36/2004-ST under Section 68(2) of the Finance Act, 1994 notifying the service recipient in India as the person liable to pay service tax was issued. 5. We have carefully considered the submissions from both the sides and perused the records. The period of dispute in this case is from August, 2002 to March, 2004. There is no dispute about the fact that the service received by the appellant from the Foreign Service provider is a taxable service. The point of dispute is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service provider to pay service tax on their behalf. But with effect from 16.8.2002 the Service Tax Rules wise amended and the above mentioned proviso to Rule 6(1) was deleted and instead of this, Rule 2(1) (d) was amended by introducing a clause (iv) which provided that in case of taxable service received from the foreign service provider not having office in India it is the service recipient in India, who would be liable to service tax. In this case, the dispute is for the period from 16.8.2002 when proviso to Rule 6(1) of Service Tax Rules had been deleted and hence judgement of the Apex Court in Kerala State Electricity Board (supra) which is with regard to proviso to Rule 6(1) as the same existed prior to 16.8.2002 would not be applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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