Custom, Excise & Service Tax Tribunal
Cce, Indore vs M/S Hindustan Motors Ltd on 15 July, 2009
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI COURT NO. II Service Tax Appeal No. 475 of 2007-Cust. Br. (Arising out of Order-in-Appeal No. IND-1/106-109/2007 dated 18.5.2007 passed by the Commissioner (Appeals), Customs & Central Excise, Indore) CCE, Indore Appellant Vs. M/s Hindustan Motors Ltd. Respondent
Service Tax Appeal No. 476 of 2007 (Arising out of Order-in-Appeal No. IND-1/106-109/2007 dated 18.5.2007 passed by the Commissioner (Appeals), Customs & Central Excise, Indore) CCE, Indore Appellant Vs. M/s Avtec Ltd. Respondent Service Tax Appeal No. 757 of 2007 (Arising out of Order-in-Appeal No. IND-1/178/2007 dated 8.10.2007 passed by the Commissioner (Appeals), Customs & Central Excise, Indore) CCE, Indore Appellant Vs. M/s Avtec Ltd. Respondent Appearance Appeared for Appellant : Shri Sansar Chand, DR Appeared for Respondent: Shri Ramesh Nair, Advocate Date of Hearing: 15.7.2009 CORAM: HONBLE MR. D.N. PANDA, JUDICIAL MEMBER HONBLE MR. RAKESH KUMAR, TECHNICAL MEMBER Order No.dated.
Per D.N. Panda :
Ld. Counsel Shri Ramesh Nair submits that when the service recipient was not liable to tax in respect of the service of technical information and assistance, there shall be no recovery of the Service Tax from the recipient under law. All the three Appeals relate to the Adjudication made for the service period from 1.4.98 to 31.6.05. He relies on the judgment of the Honble Court of Bombay in the case of Indian National Shipowners Association Vs. Union of India reported in 2009 (13) STR 233 (Bom.) and submits the recipient of certain category of services were not liable to tax prior to 18.4.06. When the services were received from abroad before such date, in absence of statutory provision, the Adjudication made for levy of Service Tax on the Appellants are unsustainable.
2. Ld. DR Shri Sansar Chand submits that there is a Larger Bench decision in the case of Hindustan Zinc Ltd. Vs. CCE reported in 2008 (11) STR 338 (Tri. LB) holding that levy of Service Tax is on rendering of taxable service and not on person. Therefore relying on the decision in the case of Hindustan Zinc (supra), the Adjudication sustained. He also relies on the decision of Honble High Court of Rajasthan in the case of Union of India Vs. Aditya Cement reported in 2008 (10) STR 228 for arguing that services being taxable, from whom that tax is realisable is immaterial.
3. Heard both sides.
4. There is no dispute by Revenue that the Appellant was recipient of certain services relating to the period 1.4.98 to 30.6.05. This is certainly the period prior to 18.4.2006. When payment of Service Tax was called for from the recipient of services from 18.4.06, this Appellant should not suffer following decision of Honble High Court of Bombay in the case of Indian National Shipowners Association (supra). We have looked into the provisions of Section 68 of the Finance Act 1994. In terms of sub section 2 power has been reserved for the Central government to notify the persons who shall pay taxes when the normal rule of law under sub-section (1) of Section 68 is that the service provider has to pay tax. Also we have looked into Section 66A of the Finance Act 1994. Before Section 66A was enacted there was no authority under law to realise levy of service tax from a person who is recipient in India receiving certain service from outside India. All these aspects have been dealt by the Honble High Court of Bombay in the case of Indian National Shipowners Association. Therefore the Larger Bench decision in the case of Hindustan Zinc Ltd. which was rendered on 27.6.2008 had no occasion to get the benefit of decision of Honble High Court of Bombay made in Indian National Shipowners Association rendered on 11.12.08. Therefore law laid down by Honble High Court of Bombay shall govern the field in stead of Larger Bench decision. Similarly Revenues reliance on the decision of Honble High Court of Rajasthan was on the context of Section 66 (2) of the Finance Act 1994. The Appeal of Revenue was dismissed in that case. Even following the ratio laid down by Honble High Court of Rajasthan that when there was no notification for liability, Revenue has no scope to argue further in the present Appeals when there was no enactment to fasten liability in all the three Appeals under Section 66(A) of the Finance Act 1994. Further, decision of Honble High Court of Bombay made on 11.12.08 while the decision in Aditya Cement was made by the Honble High Court of Rajasthan was made on 26.2.08.
5. In view of the ratio laid down by Honble High Court of Bombay and statutory provision of Section 66 A of the Finance Act, 1994 and also getting support from Section 68(2) of Finance Act, 1994, we dismiss all the three Appeals of Revenue.
(Dictated & pronounced in open Court) (D.N. PANDA) JUDICIAL MEMBER (RAKESH KUMAR) TECHNICAL MEMBER RM