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of <h1>Tribunal rules in favor of appellant exempting overseas services. No tax liability pre-18.04.2006. Retrospective amendments don't create tax.</h1> <h3>M/s. Nortel Networks (I) Pvt. Limited Versus CST, New Delhi</h3> M/s. Nortel Networks (I) Pvt. Limited Versus CST, New Delhi - 2017 (52) S.T.R. 489 (Tri. - Del.) Issues:1. Taxability of services provided to overseas associated entities under Export of Service Rules, 2005.2. Liability for service tax on Manpower Supply and Recruitment Services prior to 18.04.2006.3. Retrospective effect of amendments to Section 67 of the Finance Act, 1994 on tax liability based on book entries.Analysis:Issue 1: Taxability of services to overseas entitiesThe impugned order confirmed a demand for services provided to overseas entities, rejecting the appellant's claim for immunity under the Export of Service Rules, 2005. However, the Tribunal held in favor of the appellant citing precedents like Microsoft Corporation India Pvt. Ltd. vs. CST and Vodafone Cellular Ltd. vs. CCE, stating that such services fall within the ambit of the Export of Service Rules, 2005.Issue 2: Liability for service tax on Manpower Supply and Recruitment ServicesA demand for service tax on Manpower Supply and Recruitment Services provided by overseas entities to the appellant was confirmed in the impugned order. The Tribunal ruled that prior to 18.04.2006, the recipient of such services was not liable for tax, as established in precedents like Indian National Shipowners Association vs. UOI. The decision emphasized that secondment of employees from abroad for service in India does not constitute Manpower Supply or Recruitment service, as seen in cases like Computer Science India Pvt. Ltd. vs. CST.Issue 3: Retrospective effect of amendments to Section 67Regarding the liability based on book entries made prior to 10.05.2008, the Tribunal held that there is no liability for tax remittance solely due to amendments in Section 67 of the Act. Precedents like Sify Technologies vs. CCE were cited to support this conclusion.In conclusion, the impugned order confirming the demand, interest, and penalties was quashed, and the appeal was allowed. The Tribunal dismissed the Miscellaneous Application as infructuous since the appeal was disposed of, with no order as to costs.
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