Custom, Excise & Service Tax Tribunal
Cce, Ghaziabad vs M/S.Trelleborg Automative India (P) ... on 15 May, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, PRINCIPAL BENCH NEW DELHI, COURT NO. 1
Date of Hearing/Decision: 15.05.2014
For approval and signature:
Honble Mr. Justice G. Raghuram, President
Honble Mr. Rakesh Kumar, Member (Technical)
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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?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
Appeal No.ST/120/2009-CU(DB)
[Arising out of Order-in-Appeal No.257-CE/GZB/2008 dated 14.11.2008
passed by the Commissioner of Central Excise (Appeals), Meerut-I].
CCE, Ghaziabad Appellant
Vs.
M/s.Trelleborg Automative India (P) Ltd. Respondent
Appearance:
Rep. by Shri Pramod Kumar, Joint CDR for the appellant. Rep. by none for the respondent. CORAM :
Honble Mr. Justice G. Raghuram, President Hon'ble Mr. Rakesh Kumar, Member (Technical) Final Order no.52343/2014 /dated:15.05.2014 Rakesh Kumar:
The facts leading to filing of this appeal, in brief, are as under:-
1.1 The respondent are manufacturers of Anti Vibration Systems and its parts falling under sub-heading 87099900 and 820700 of the Central Excise Tariff. The respondent entered into an agreement with M/s. Trelleborg Automotive Technical Centre, GMBH, Germany (hereinafter referred to as M/s. TAG for obtaining technical knowhow from them for use in the manufacture of Anti Vibration Systems and its parts. In terms of the collaboration agreement, payments were to be made by the respondent to M/s.TAG for the said technical knowhow. During the period from 2001-2002 to 31.8.2004, the respondent paid an amount of Rs.1,90,26,534/- to M/s.TAG. The department was of the view that the respondent have received taxable services of Consulting Engineers under Section 65(105)(g) read with Section 65(31) of the Finance Act, 1994 and hence, in terms of the provisions of Rule 2 (1)(d)(iv) of the Service Tax Rules, 1994, the respondent, as recipient of the taxable service in India, would be liable to pay service tax on the amount paid by them for receiving the above services. On this basis, after issue of show cause notice, the jurisdictional Addl. Commissioner passed an order-in-original dated 24.1.2008 by which, he confirmed the demand of duty of Rs.12,71,044/- against the Respondent along with interest thereon under Section 71 of the Finance Act, 1994 and imposed penalty of equal amount on them under Section 78 ibid and another penalty of Rs.500 on them under Section 75A of the Act. On appeal being filed to the Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dated 24.01.2008 set aside the Addl. Commissioners order holding that the service received by the respondent is not the Consulting Engineers service and in this regard, he relied upon the Tribunals decision in the case of Turbo Energy Ltd. Vs. CCE, Chennai-III reported in 2006 (3) STR 78 (Tribunal-Chennai) and Navinon Ltd. Vs. CCE, Mumbai-IV reported in 2006 (3) STR 396 (Tribunal-Mum.). Besides this, he also held that since the service had been received during the period prior to 1.1.2005, in view of the judgement of the Tribunal in the case of Ispat Industries reported in 2007 (8)STR 212 (Mum.), no service tax could be charged from the respondent as service recipient, as notification no.36/2004-ST dated 30.12.2004 issued under Section 68(2) of the Finance Act, 1994, providing that in respect of the service provided by an offshore/foreign service provider to a person in India, it is the person receiving the service in India, who would be the person liable to pay the service tax, became effective w.e.f. 1.1.2005 only. The Commissioner (Appeals) also observed that the service provided by the respondent was intellectual property tax, which became taxable w.e.f. 10.09.2004 and hence, for this reason also, during the period of dispute i.e. during the period prior to 10.07.2004, the IPR service received by the respondent was not taxable. Against this order of the Commissioner (Appeals), this appeal has been filed.
2. Heard both the sides.
3. Nobody appeared for the respondent, though a notice had been issued to them. In view of this, accordance with the provisions of Rule 21 of the CESTAT (Procedure) Rules, so far as the respondent are concerned, the matter is being decided ex parte.
3. Heard Shri Pramod Kumar, the learned Joint CDR, who assailed the impugned order by reiterating the grounds of appeal in the Revenues appeal.
4. We have considered the submissions of the ld. Joint CDR and gone through the record on this case.
5. The undisputed fact is that the service in question, which is alleged to be the Consulting Engineer Service, had been provided during the period from April, 2001 to August 31, 2004 to the respondent by an offshore service provider-M/s.TAG, Germany, who do not have any business establishment or office in India. The service tax is sought to be recovered from the respondent as service recipient by invoking Rule 2(1)(d)(iv) of the Service Tax Rules, 1994. Honble Bombay High Court in the case of Indian National Ship Owners Association (supra) held that notwithstanding the provisions of Rule 2(1)(d)(iv) of the Service Tax Rules, 1994, since the specific provision in form of Section 66A providing for recovery of the service tax from the service recipient in India in respect of a taxable service received from an offshore service provider was introduced w.e.f. 18.04.2006 only, during the period prior to 18.04.2006, the service tax on the services, in question, could not be recovered from the respondent. In view of this, we hold that there is no merit in the Revenues appeal. The same is dismissed.
[operative part already pronounced] (Justice G. Raghuram) President (Rakesh Kumar) Member (Technical) Ckp.
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