Custom, Excise & Service Tax Tribunal
Nashik vs Larsen & Toubro Ltd on 28 March, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: ST/155/2005
[Arising out of Order-in-Appeal No: CEX-XI/JMJ/74/APL/NSK /2005 dated 31/03/2005 passed by the Commissioner of Central Excise & Customs (Appeals), Nashik.]
For approval and signature:
Honble Shri P.R. Chandrasekharan, Member (Technical)
Honble Shri Anil Choudhary, Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Commissioner of Central Excise & Customs
Nashik
Appellant
Vs
Larsen & Toubro Ltd.
Respondent
Appearance:
Shri S.G. Dewalvar, Addl. Commissioner (AR) for the appellant None for the respondent CORAM:
Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) Date of hearing: 28/03/2013 Date of decision: 28/03/2013 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
The appeal arises from Order-in-Appeal No: CEX-XI/JMJ/74/APL/NSK /2005 dated 31/03/2005 passed by the Commissioner of Central Excise & Customs (Appeals), Nashik. The appeal has been filed by the Revenue.
2. The respondent herein, M/s. Larsen & Toubro Ltd., obtained technical know-how and consultancy from Vetro Pack Ltd., Switzerland and paid royalty on such service received. The department was of the view that the services received is coming under the category of Consultancy Engineering Service and the respondent is liable to discharge service tax liability under Section 68 of the Finance Act, 1994 read with Rule 6 of the Service Tax Rules, 1994 during the period 15/05/1998 to 30/05/2003. Accordingly, a notice dated 13/10/2003 was issued to the respondent demanding service tax of ` 22,38,566/- along with interest thereon and also proposing to penalties under the provisions of Finance Act, 1994. The demand notice was adjudicated and the demands were confirmed along with interest any by imposing penalties. The respondent preferred an appeal before the lower appellate authority who vide the impugned order allowed the appeal on the basis of the decisions of this Tribunal in the case of Navinon Ltd. vs. Commissioner of Central Excise 2004 (172) ELT 400; Aviat Chemicals Pvt. Ltd. vs. Commissioner of Central Excise 2004 (170) ELT 466 and Bajaj Auto Limited vs. Commissioner of Central Excise 2004-TIOL-970-CESTAT-MUM. Revenue is aggrieved of the same and is before us.
3. The learned Additional Commissioner (AR) appearing for the Revenue submits that as per Rule 6 of Service Tax Rules, 1994, in case the service is provided by a person who is a non-resident or is from outside India and does not have any office in India, then the service tax thereon shall be paid by such person or on his behalf by persons authorized by him. Since in the present case the respondent has received service he is liable to discharge service tax liability and accordingly he prays that the appeal be allowed.
4. None appeared on behalf of the respondent.
5. We have carefully considered the submissions. In the instant case, the transaction is one of supply of technical know-how and payment of royalty thereon. Supply of technical know-how does not fall under the category of Consultancy Engineers Service and, therefore, the classifications for levy of service tax adopted is incorrect.
5.1. Secondly, the service provider is a foreign company and he has not authorized the respondent to pay service tax on his behalf and, therefore, the service tax liability cannot be fastened on to the appellant as decided by this Tribunal in the case of Navinon Ltd., cited supra.
5.2. Thirdly, it is observed that Section 68 read with Rule 6 of the Service Tax Rules, 1994 would apply in the case of a service rendered in India by a non-resident who does not have any office in India. Rendering of service in India is distinct and different from receipt of service in India. In the present case, technical know-how has been provided by the foreign service provider. Therefore, the transaction is one of providing of service from abroad and receiving it in India, that is import of service and, therefore, the provisions of Section 68 read with Rule 6 of Service Tax Rules, 1994 do not apply. In the case of service received from abroad, the said activity become taxable w.e.f. 18/04/2006 when Section 66A was inserted in Chapter V of the Finance Act, 1994 enabling the government to levy service tax on reverse charge basis from the service recipient in India in respect of service provided from abroad as held by the honble Bombay High Court in the case of Indian National Shipowners Association2009 (13) STR 235 (Bom.), which was affirmed by the honble apex Court.
6. In view of the above, we do not find any merit in this appeal and accordingly the same is dismissed.
(Pronounced in Court) (Anil Choudhary) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 2