Cross-border service tax liability cannot be imposed on the recipient before Section 66A created the charging provision.

Service tax could not be demanded from an Indian recipient for commission agent services received from abroad for a period before Section 66A came into force, because no charging provision then existed to impose recipient liability on cross-border services. The related rule was amended only later, so the demand lacked temporal and statutory support for the disputed period. The demand was therefore set aside and the assessee succeeded.

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Issues: Whether service tax could be demanded from the recipient in India for services provided by an overseas commission agent for the period prior to the introduction of Section 66A, and whether the demand and penalties could therefore be sustained.

Analysis: The demand related to a period before the introduction of Section 66A, under which the recipient of taxable services provided by a person outside India was made liable to pay service tax. Before that provision came into force, there was no charging provision bringing such cross-border recipient liability into existence for the period in dispute. The corresponding rule was also amended only thereafter. In view of the temporal scope of the demand and the absence of a charging provision for the relevant period, the demand could not survive.

Conclusion: The demand was not sustainable for the period prior to Section 66A and was set aside. The assessee succeeded and the Revenue's appeal was dismissed.

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