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of <h1>Court affirms Tribunal's decision in favor of assessee over Revenue appeal on service tax liability</h1> <h3>The Commissioner of Central Excise Versus M/s. Motherson Automotive Technologies & Engineering</h3> The High Court upheld the Tribunal's decision, ruling in favor of the assessee and against the Revenue. The Court dismissed the appeal, stating that there ... Import of services - Consulting Engineer service - Inclusion of technical know how fees - Held that:- Circular F. No. 276/8/2009-CX8A is based on the decision of the Bombay High Court as confirmed by the Supreme Court in Union of India Vs Indian National Shipowners Association [2009 (12) TMI 850 - SUPREME COURT OF INDIA] - there is no tax liability on the assessee in respect of the transaction during the relevant period - service tax liability on any taxable service provided by a non resident or a person located outside India, to a recipient in India, would arise w.e.f. 18.4.2006 - Decided against Revenue. Issues:1. Whether the payment made towards services Consulting Engineers in the form of technical know-how fee should suffer service taxRs.2. Whether the services provided by a company shall fall under the ambit of consulting engineers as per the Finance ActRs.Analysis:Issue 1: The respondent entered into a license agreement with Tennex Europe Ltd. for technical information and assistance for manufacturing air induction systems. The Department demanded service tax on the technical know-how fees paid by the respondent to Tennex Europe Ltd. The Tribunal ruled in favor of the respondent, and the Department appealed the decision.Issue 2: The circular issued by the Central Board of Customs clarified the applicability of service tax on services provided by non-residents to recipients in India. The circular stated that service tax liability arises from 18.4.2006, as per the enactment of section 66A of the Finance Act, 1994. Based on this circular and the decision of the Bombay High Court confirmed by the Supreme Court, it was concluded that there was no tax liability on the assessee in this case.The High Court upheld the Tribunal's decision, ruling in favor of the assessee and against the Revenue. The Court dismissed the appeal, stating that there was no need for interference with the Tribunal's order based on the subsequent position of the law regarding service tax liability on services provided by non-residents to recipients in India.
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