Reverse charge service tax on imported services was not leviable before Section 66A came into force.

Service tax was not payable on reverse charge basis for services imported from abroad before 18.04.2006, because Section 66A of the Finance Act, 1994 had not yet been inserted. The Tribunal followed the settled position that, in the absence of that statutory provision, no reverse-charge liability arose on services received from foreign-based persons for the relevant period. The demand was therefore unsustainable, the assessee's challenge succeeded, and the demand order was set aside with consequential benefits according to law.

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Issues: Whether service tax was payable on reverse charge basis on services received from foreign-based persons for the period prior to insertion of Section 66A of the Finance Act, 1994.

Analysis: The dispute turned on the taxability of services imported from abroad before 18.04.2006. The Tribunal applied the settled position that, prior to the introduction of Section 66A in the Finance Act, 1994, there was no statutory liability to pay service tax on reverse charge basis on such import of services.

Conclusion: The issue was decided in favour of the assessee, and no service tax was exigible on reverse charge basis for the relevant period.

Final Conclusion: The appeal succeeded and the demand order was set aside, with consequential benefits to follow in accordance with law.

Ratio Decidendi: In the absence of Section 66A of the Finance Act, 1994, service tax could not be levied on reverse charge basis on services imported from abroad for the period prior to 18.04.2006.

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