Appellate tribunal directs refund of service tax pre-April 2006, citing no service tax for reverse charge services.

The appellate tribunal upheld the Commissioner (Appeals) decision, directing the Adjudicating Authority to grant the refund of service tax deposited by the respondent for the period before April 2006, along with interest within 75 days from the tribunal's order. The tribunal relied on a Bombay High Court judgment, stating that no service tax is leviable on a reverse charge basis for services received in India from service providers located outside India.

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Issues involved:
(i) Liability to pay service tax for services of Commission Agents provided by non-resident foreign service providers from June 2005 to April 2006.
(ii) Liability to pay service tax for services received from foreign service providers from April 2006 to October 2007.
(iii) Admissibility of the refund claim by the appellants.

Analysis:
1. The respondent, a manufacturer and exporter of footwear, availed services from overseas agents for procuring export orders and paid service tax on a reverse charge basis. They later filed a refund claim, citing an erroneous understanding of the law based on a Supreme Court judgment regarding the levy of service tax on services provided within India under the Finance Act, 1994.

2. The first issue pertains to the liability of the appellants to pay service tax for services provided by non-resident foreign service providers from June 2005 to April 2006. The respondent argued that services availed outside India are not subject to Indian service tax laws, citing Section 64 of the Finance Act, 1994. A show cause notice was issued, demanding service tax for the mentioned period.

3. The second issue concerns the liability for service tax on services received from foreign service providers from April 2006 to October 2007 after the insertion of Section 66A in the Finance Act, 1994. The Commissioner (Appeals) referenced a Bombay High Court judgment, stating that no service tax is leviable on a reverse charge basis for services received in India from service providers located outside India.

4. The third issue revolves around the admissibility of the refund claim by the appellants. The Order-in-Original rejected the refund claim under relevant provisions. However, the Commissioner (Appeals) ruled in favor of the respondent based on the Bombay High Court judgment, setting aside the order denying the refund for the period before April 2006.

5. The appellate tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals) decision based on the binding precedent of the Bombay High Court judgment. The tribunal directed the Adjudicating Authority to grant the refund of service tax deposited by the respondent for the period before April 2006 along with interest within 75 days from the date of the tribunal's order.

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