2012 (4) TMI 405 - AT - Service Tax

Tribunal rejects condonation plea, upholds reverse charge tax liability, and rules in favor of assessee on foreign commission.

The Tribunal dismissed the application for condonation of delay in filing a cross objection as the applicant was not aggrieved with any portion of the ... Maintainability of cross-objection - service tax reverse charge liability for commission paid to a non-resident - retrospective applicability of reverse charge from 01.01.2005 - precedent binding on reverse charge applicabilityMaintainability of cross-objection - The application for condonation of delay and the cross objection filed by the assessee are not maintainable. - HELD THAT: - The Tribunal found that the assessee misconceived the purpose of filing a cross objection because the entire order-in-appeal was in the assessee's favour; being not aggrieved by any portion of that order, the assessee lacked locus to file a cross objection. On that basis the application for condonation of delay and the cross objection were dismissed as not maintainable. [Paras 2]Application for condonation of delay and the cross objection dismissed as not maintainable.Service tax reverse charge liability for commission paid to a non-resident - retrospective applicability of reverse charge from 01.01.2005 - precedent binding on reverse charge applicability - Whether the Revenue's appeal against the finding that no service tax was payable under reverse charge for commission paid to a person situated abroad prior to 18.04.2006 should succeed. - HELD THAT: - The Tribunal noted that the question is no longer res integra and that the issue has been settled by the precedent relied upon by the first appellate authority. The Tribunal referred to the judgment in the National Shipowners Association matter, which was applied in favour of the assessee and has been upheld by the Supreme Court. Given that the demand relates to commission paid to a person situated abroad prior to 18.04.2006, the Tribunal followed the cited precedent and held that the impugned order did not suffer from legal infirmity. [Paras 5, 6, 7, 8]Revenue's appeal rejected; impugned order affirmed following the settled precedent.Final Conclusion: The cross-objection and condonation application are dismissed as not maintainable; the Revenue's appeal is rejected and the impugned order is affirmed in view of the settled precedent on reverse charge liability for commission paid to a non-resident prior to 18.04.2006. Issues: Condonation of delay in filing cross objection, Service Tax liability under reverse charge mechanism.In the judgment, the issue of condonation of delay in filing a cross objection was addressed. The applicant sought condonation for the delay in filing the cross objection in Appeal No. ST/241/2010. However, the Tribunal found that the applicant mis-conceived the issue as the entire order-in-appeal was in their favor, and they could not be aggrieved with any portion of the order for filing a cross objection. Consequently, the application for condonation of delay and the cross objection were dismissed as not maintainable.Regarding the Service Tax liability under the reverse charge mechanism, the Tribunal examined the reliance placed on the judgment of the Hon'ble High Court of Bombay in the case of National Shipowners Association versus Union of India. The Service Tax liability under the reverse charge mechanism was deemed applicable from 01.01.2005 based on the Tribunal's judgment in the case of Hindustan Zinc Ltd, which was upheld by the Apex Court. The Tribunal noted that the issue was settled by the judgment of the Hon'ble High Court of Bombay in favor of the assessee, as upheld by the Hon'ble Supreme Court. The dispute in this case revolved around the Service Tax liability for commission paid to a person abroad before 18.04.2006. Relying on the judgment in the case of National Shipowners Association, the Tribunal held that the impugned order was correct, legal, and free from infirmity. Consequently, the appeal filed by the Revenue was rejected.