Custom, Excise & Service Tax Tribunal
M/S Hero Cycles Ltd vs Cce, Ludhiana on 22 March, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. III Service Tax Appeal No. 395 & 405 of 2008 [Arising out of Order-In-original No.07/Ldh/2008 dated 24.03.08 passed by Commissioner, Central Excise, Ludhiana.] For approval and signature: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. Rakesh Kumar, Member (Technical) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Service Tax Appeal No. 395 of 2008 M/s Hero Cycles Ltd. Appellants Vs. CCE, Ludhiana Respondent
Service Tax Appeal No. 405 of 2008 CCE, Ludhiana Appellants Vs. M/s Hero Cycles Ltd. Respondents Appearance:
Shri Sudhir Malhotra, Advocate for the Appellant Shri Pramod Kumar, AR for the Respondents CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Hon'ble Mr. Rakesh Kumar, Member (Technical) Date of Hearing/decision : 22.03.2013 ORDER NO .FO/ 55900-55901 /2013-Cus(Br) Per Archana Wadhwa (for the Bench):
Both the appeals, one filed by the assessee and the other by the Revenue are being disposed of by a common order as both are arising out of same impugned order of Commissioner (Appeals).
2. After hearing both sides, we find that the during the period April, 2002 to December, 2006, the appellants availed the services of foreign firm National Bicycles Industries Co. Japan, who have no offices in India, Revenue raised the demand against the assessee on the ground that they have to pay the Service Tax, as recipient of said services. Same was confirmed by the original adjudicating authority.
3. While adjudicating show cause notice dated 26.2.07, the Commissioner dropped the major part of the demand on the ground of limitation as also on the ground that some of the services do not fall under the category of Consulting Engineer. He, however, confirmed the demand for the period falling within the limitation on the ground that technical know-how services stand provided by the Japan firm.
4. Assessee is in appeal against the confirmation of demand whereas the Revenue is in appeal against dropping of demand.
5. After appreciating the submissions made by both sides, we find that declaration of law by the Honble Bombay High Court in the case of Indian National Shipowners Association vs. Union of India [2009 (13) STR 235 (Bom)] is to the effect that service tax is required to be paid, in case of receipt of services from a foreign provider, only with effect from 18.4.06, when the provisions of section 66A were introduced. The said order stand confirmed by the Honble Supreme Court as reported in [2010 (17) STR J 57 (SC) ] and stand followed by the Tribunal in various subsequent decisions.
6. In view of the above, we hold that appellant is liable to pay the service tax in respect of receipt of services from foreign service provider only with effect from 18.4.06. The said demand with effect from the said date would be quantified by the lower authorities accordingly.
7. Further, we note that inasmuch as the issue involved is a interpretation of provisions of law, which has been the subject matter of various decisions by judicial and quasi-judicial authorities, we hold that there cannot be any malafide on the part of the appellant, calling for imposition of any penalty upon them. We accordingly set aside the penalty imposed upon them.
8. As we have already held that appellant is liable to pay service tax only with effect from 18.4.06, Revenues appeal against that part of the impugned order of Commissioner vide which he has dropped the proceedings on the point of limitation as also on merits for the period prior to 18.4.06 no longer survive. The same are accordingly rejected.
9. Both the appeals are disposed of in the above manner.
(Pronounced in the open court)
( Archana Wadhwa ) Member(Judicial)
( Rakesh Kumar ) Member(Technical)
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