Custom, Excise & Service Tax Tribunal
M/S Himachal Futuristic ... vs Cce, Chandigarh on 4 August, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Date of Hearing : 4.8.2011 Service Tax Appeal No. 304 of 2008 [Arising out of the Order-in-Appeal No. 133/CE/CHD/2008 dated 13.2.2008 passed by the Commissioner of Central Excise (Appeals), Chandigarh] Coram: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri Mathew John, Member (Technical) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Whether their Lordships wish to see the fair copy of the order? 4. Whether order is to be circulated to the Department Authorities? M/s Himachal Futuristic Communications Ltd. Appellant Vs. CCE, Chandigarh Respondent
Appearance:
Appeared for Appellant : Shri Rupender Singh, Advocate
Appeared for Respondent : Shri Amrish Jain, SDR
CORAM: Honble Ms. Archana Wadhwa, Member (Judicial)
Honble Shri Mathew John, Member (Technical)
Order No.dated.
Per Archana Wadhwa :
Brief facts of the case are that the appellant are engaged in the manufacture of telecommunication equipments. These equipments are manufactured by them with the technical know how provided by certain Foreign Companies. The appellant paid huge amounts towards technical know how fees to the foreign companies for providing technical know how/transfer of technology during the year 2002-2003 and 2003-2004. It has been imputed that the appellant are liable to pay service tax on amount paid towards technical know how fees to the foreign companies under the category of consulting engineers. The adjudicating authority in the order appealed against confirmed demand of service tax amounting to Rs.27,23,882/-. Penalty was also imposed upon the appellants under Section 76, 77 & 78 of the Act.
2. Being aggrieved with the order of the adjudicating authority, the appellant filed the appeal reiterating the grounds made before the adjudicating authority. The appellants contend that Technical know how supplied by the foreign supplier would fall under the head Intellectual Property Services and not under Consulting Engineers and these services are taxable w.e.f. 10.9.2004. Further, the services have been provided by a non-resident who does not have any office in India. The service recipient is liable to pay service tax only from 18.4.2006, when the charging Section 66A was incorporated, as such the demand is not sustainable as the receipt of service was not made liable to pay tax during the relevant period.
3. The Commissioner (Appeals) rejected the appeal on merits as also on the issue that the service tax recipient in India was liable to pay service tax only from 18.4.2006 and by referring the provisions of Notification No. 12/2002-ST dated 1.8.2002, he held that burden of discharging service tax liability was shifted to the service receiver when the service provider is a non-resident or service is provided from outside India.
4. However, we do not feel the need of referring of all of such notifications inasmuch as the issue is no more res integra and stands settled by the Bombay High Courts decision in the case of Indian National Shipowners Association Vs. Union of India reported in 2009 (13) STR 235 (Bom.). It stands held that the recipient of various services in India were not liable to pay service tax for the services received from abroad prior to 18.4.2006, when the provisions of Section 66A of Finance Act 1994 were enacted. The said judgement stand approved by the Honble Supreme Court, when the appeal filed by the Revenue was dismissed as reported in 2010 (13) STR J57(SC). As the period involved in the present appeal is prior to 18.4.2006, the ratio of the said decision is fully applicable to the facts of the case and no service tax liability can be upheld against the appellant. We accordingly set aside the impugned order and allow the appeal with consequential relief.
(Pronounced in open Court) (Archana Wadhwa) Member (Judicial) (Mathew John) Member (Technical) RM