Service tax on foreign consultancy services before 1.1.2005 could not be recovered from the recipient under binding Larger Bench precedent.

Service tax liability on the recipient of management consultancy and consulting engineer services received from a foreign firm was considered for the pre-1.1.2005 period. The Tribunal applied an earlier Larger Bench ruling on substantially identical facts and treated it as controlling, stating that service tax was not recoverable from the recipient for that period. On that basis, the demand and penalty were set aside and consequential relief followed.

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Issues: Whether service tax could be demanded from the recipient of management consultant and consulting engineer services received from a foreign firm for the period prior to 1.1.2005.

Analysis: The dispute concerned service tax liability on the recipient of services for the period 1998-2003. The Tribunal noted that a Larger Bench had already held that no service tax could be demanded from the recipient for the period prior to 1.1.2005 on substantially similar facts, and treated that ruling as governing the present appeal.

Conclusion: Service tax could not be demanded from the recipient for the relevant pre-1.1.2005 period, and the issue was decided in favour of the assessee.

Final Conclusion: The demand and penalty were set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where a Larger Bench has held that service tax is not recoverable from the recipient of services for a period prior to 1.1.2005 on substantially identical facts, the same principle governs subsequent cases.

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