9911796707
TMI Blog2024 (1) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.12.2004. 2. While admitting the appeal, following question of law was framed by this Court : "Whether it was open to the respondent to recover the amount of service tax before issuing notification under Section 68(2) of the Finance Act, 1994?" 3. The respondent contested the appeal while claiming that in view of provision of Rule 2(1)(d)(iv) of the Service Tax Rules, 1994, the tax paid by the appellant in respect of services rendered from the non resident service provider is liable to be refunded. 4. Learned counsel for the appellant has submitted that the question regarding payment of service tax in respect of services rendered from the non-resident service provider has already been decided by the Bombay High Court in Indian Nation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eiving taxable service in India. Apart from the fact that this rule is contrary to the provisions of Section 68 and other provisions of the Act, under this provision the recipient of the service became liable for paying the service tax provided the service was received in India. The entire case of the Petitioners is in relation to the service received by the vessels and ships owned by the members of the Petitioner-association outside India. Therefore, it cannot be said that on the basis of Rule 2(1)(d)(iv), service tax can be levied on the members of the Petitioners-association. It is further to be seen here that Section 64 gives powers to the Central Government to make rules for carrying out the provisions of the Chapter. The chapter relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-2004, any taxable service provided by a person who is a non-resident or is from outside India is notified. If Rule 2(1)(d)(iv) is taken to be rule framed pursuant to this provision, then a person who receives taxable service in India from a person who is non-resident or is from outside India becomes taxable and not service rendered outside India by a person who is non-resident or is from outside India. Therefore, levy of service tax from the members of the Petitioners-association from 1-2-2005 (sic) 1-1-2005 cannot be justified. 19. Then reliance is placed on explanation which is added below Section 65(105). That explanation was added by Finance Act, 2005 with effect from 16-62005. That explanation reads as under: Explanation - For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 recipients of the services and the Rule framed which brought about this situation has been declared by the Supreme Court to be invalid. The law laid down by the Supreme Court in its judgment in Laghu Udyog (supra) is squarely applicable to Rule 2(1)(d)(iv), which is relied on in this case. It appears that it is first time when the Act was amended and Section 66A was inserted by Finance Act, 2006 w.e.f. 18-4-2006, the Respondents got legal authority to levy service tax on the recipients of the taxable service. Now, because of the enactment of Section 66A, a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Association (supra). 9. In the present case, the respondents have rejected the refund claim of the appellant of Rs. 4,69,561/- in respect of service rendered from a non-resident provider for the period prior to 31.12.2004. 10. However, in view of the above settled position of law the said action of the respondents is illegal and in such circumstances, the impugned order dated 17.08.2007 passed by the Customs Excise & Service Tax Appellant Tribunal, New Delhi is hereby set aside and consequentially the orders dated 17.06.2005 passed by the Deputy Commissioner Central, Excise and Division, Bhilwara and 20.10.2005 passed by the Commissioner (Appeal II) Customs & Central Excise, Jaipur are also set aside. 11. The respondents are directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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