Service tax on consulting engineering services from outside India applies only from the notified date, not earlier periods.

Consulting engineering service received from outside India by a provider with no office in India was held taxable only from 1.1.2005 under Notification No. 36/2004. For the pre-1.1.2005 period, the recipient could not be fastened with service tax liability because the service was not brought into the tax net for that earlier period. The contrary reliance on the Kerala High Court view was not accepted for determining liability here, and the demands were set aside.

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Issues: Whether the recipient of consulting engineering service received from outside India, where the service provider had no office in India, was liable to pay service tax for the period prior to 1.1.2005.

Analysis: The Larger Bench decision in Hindustan Zinc Ltd. held that taxable service provided by a non-resident or from outside India, with no office in India, was specified as taxable only with effect from 1.1.2005 under Notification No. 36/2004, and therefore the recipient could not be fastened with service tax liability for any prior period. The contrary view based on the Kerala High Court decision was not accepted as governing the present liability issue for the relevant period.

Conclusion: The recipient was not liable to pay service tax for the disputed period prior to 1.1.2005.

Final Conclusion: The appeals succeeded and the demands were set aside, granting the assessee relief from the service tax liability for the pre-1.1.2005 period.

Ratio Decidendi: Where a service rendered from outside India by a provider without an office in India was brought into the tax net only from a specified future date, the recipient could not be made liable to pay service tax for any prior period.

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