Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Fairfield Atlas Ltd on 19 June, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. ST/123/07 (Arising out of Order-in-Appeal No. P-II/BKS/64/2007 dated 22.5.2007 passed by the Commissioner of Central Excise (Appeals), Pune-II). 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 : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== Commissioner of Central Excise, Pune-II Appellant Vs. M/s Fairfield Atlas Ltd. Respondent Appearance: Shri V.K. Agarwal, Addl. Commissioner (AR) for Appellant None (Adjn. Request) for Respondent CORAM: SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL) SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 19.06.2013 Date of Decision: 19.06.2013 ORDER NO. Per: P.R. Chandrasekharan
The Revenue is in appeal Order-in-Appeal No. P-II/BKS/64/2007 dated 22.5.2007 passed by the Commissioner of Central Excise (Appeals), Pune-II.
2. The respondent M/s Fairfield Atlas Ltd., Kolhapur received the technical know-how for the manufacture of transmission gears from their parent company, M/s Fairfield Manufacturing Co. Inc., USA, for which they paid a royalty of Rs.3,09,97,770/- during the period April, 2003 to June, 2005. The department was of the view that the said activity is taxable under the hands of recipient of the service and accordingly a Service Tax demand of Rs.24,79,821/- was confirmed against the respondent along with interest thereon apart from imposing penalty. The respondent preferred an appeal before the lower appellate authority, who vide the impugned order, allowed the appeal on the ground that the supply of technical know-how would come under the category of Intellectual Property Right Service and not under Consulting Engineers Service. Aggrieved of the same, the Revenue is before us.
3. It is the case of the Revenue that in terms of Rule 2(1)(d)(iv) of the Service Tax Rules, 94 in respect of service provided by a person who is a non-resident or is from outside India and who does not have any office in India, the person receiving taxable service in India, would be liable to discharge Service Tax and, therefore, the respondent is rightly liable to pay Service Tax. Secondly, it is contended that the activity rendered by the foreign service provider and received by the Indian entity falls within the definition of Consulting Engineers Service and the decision to the contrary relied upon by the lower appellate authority has been challenged by the Revenue before the High Courts. It is accordingly contended that the impugned order is incorrect and merits to be set aside.
4. The ld. Addl. Commissioner (AR) appearing for the Revenue reiterates the grounds urged in the appeal memorandum.
5. None appeared for the respondent who has requested for adjournment.
6. On going through the records of the case, we are of the view that the appeal can be disposed of without hearing the respondents. The period involved in the present case is April, 2003 to June, 2005 and the service has been received during this period. The Hon'ble Bombay High Court in the case of Indian National Shipowners Association Vs. Union of India 2009 (13) STR 235 (Bom) has held that the recipient of the service from service providers situated abroad are liable to pay Service Tax on reverse charge basis only w.e.f. 18.4.2006 when Section 66A was inserted in the Chapter V of the Finance Act, 1994 and, therefore, the service received prior to that date is not taxable at the hands of the recipient. In the present case, obviously the service has been received prior to 18.4.2006 and therefore, the respondent is not liable to pay Service Tax as they are the recipient of service.
7. Accordingly, we dismiss the appeal filed by the Revenue as devoid of merits.
(Dictated and pronounced in Court)
(Anil Choudhary) (P.R. Chandrasekharan)
Member (Judicial) Member (Technical)
Sinha
4