Service Tax Not Applicable on Pre-2006 Foreign Logistics Payments and Invalid Valuation Under Rules 3 & 5

CESTAT allowed appeal concerning service tax on payments made by appellant to overseas logistics agents. Tribunal held that pre-April 2006 demand of Rs. 11,97,047 was invalid as taxation of foreign services commenced only from April 18, 2006. For period until June 2012, following Intercontinental Consultants ruling, domestic components were non-taxable. Post-July 2012 liability was incorrectly imposed by overlooking government's position on transportation services. The adjudicating authority's valuation under Service Tax Rules was flawed as it failed to properly apply Rule 3 and Rule 5 of Service Tax (Determination of Value) Rules, 2006. Tribunal set aside the original order, ruling in appellant's favor. .....

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