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TMI Blog2012 (9) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... d purchase of agricultural produce were made taxable. In the present case, the Overseas Commission Agents were not resident of India and also were not having their office in India, the liability to pay service tax was upon the respondents who were service receiver in terms of the provisions of Rule 2(d) read with Rule 6 of the Service Tax Rules, 1994. 2. The said services received by the respondents fall within the definition of "Business Auxiliary Services" as Commission agent as defined in section 65 of the Finance Act, 1994, as amended and as per the provisions of Service Tax Rules, 1994 Rule 2 sub-rule 1(d)(iv) read with Notification No.12/2002-ST dated 1.8.2002, service provided by a person who is non-resident or a person from outside of India, who does not have any office in India, the person receiving taxable services in India shall be the person liable for paying service tax. Therefore, a show cause notice bearing No. St/Gr-VII/SCN/PREV/06/06-07 dated 18.3.2008 was issued to the assessee by the Assistant Commissioner of Central Excise, Customs and Service Tax, HQ, Vadodara-II demanding Service Tax of Rs. 4,90,606/- under section 73 of the Finance Act, 1994 with appropriati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers Association v. Union of India [2009] 18 STT 212 and had allowed the appeal of the respondent holding that service tax could not be demanded from the respondents and therefore, there was no question of recovery of interest on account of delay in payment of tax or imposition of penalty. The appeal was allowed with consequential relief. When the matter was heard by the Tribunal, learned counsel for the parties agreed that the Appeal before the Tribunal was covered by the aforesaid decision of the Bombay High Court and the appeal was dismissed. 7. Mr. R.J. Oza, learned Senior counsel has vehemently urged that the appeal has been decided by the Tribunal on the concession given by the learned counsel for the department without considering his arguments. In the memo of appeal, we do not find that it had nowhere been stated that departmental counsel who appeared before the Tribunal mala fidely made concession or that he had no authority to make such concession, but on the insistence of Mr. R.J. Oza, we have heard the matter at length. 8. It is not disputed that section 66A was inserted for the first time by Finance Act, 2006 with effect from 18.4.2006 on the Service Tax Act was amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had no office or establishment in India nor the recipient in India was liable to service tax as the service tax was required to be paid by a person who had been provided service. Prior to enactment of section 66A, there was no such provision in the Act nor the authorities could levy service tax in view of Article 265 of the Constitution of India. Whether service tax could be levied prior to 18.4.2006 at the hands of recipient of service who is in India of service provider who is outside India has been considered by the Bombay High Court in the case of Indian National Shipowners Association (supra). Para 20 of the judgment of Bombay High Court is extracted below: "20. It appears that a similar provision in the rules was made applicable by the Government in relation to the Clearing Agents by making customers of the Clearing Agent liable for levy of the service tax. That question has been decided by the Supreme Court by its judgment in the case of Laghu Udyog Bharati (supra) and the Supreme Court has clearly laid down that the imposition of the service tax is on the persons rendering the services and by making a provision in the Rules, levy of tax cannot be shifted to the recipient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India, Ministry of Finance (Department of Revenue), Central Board of Excise and Customs, New Delhi has issued a circular No. 276/8/2009-CX.8A dated 26.9.2011. This circular is extracted below: "Circular: 276/8/2009-CS.8A dated 26-Sep-2011. Taxable Services-Service tax by non-resident to a recipient in India. Instruction F.No. 276/8/2009-CX.8A dated 26.9.2011 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise and Customs, New Delhi. Subject: Applicability of Service tax on taxable services provided by a non-resident or a person located outside India to a recipient in India-Regarding. Kind attention is invited to instruction F.No.275/7/2010-CS8A, dated 30.6.2010, wherein the Board had communicated its view that services tax on a taxable service received in India, when provided by a non-resident/person located outside India, would be applicable on reverse charge basis with effect from 1.1.2005, and that the ratio of judgment in M/s Indian National Shipowners Association (INSA) case [2009 (13) STR 235 (Bombay)] SSS would not apply to such cases. Further, direction was issued to field formations to defend the levy of service tax on such ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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