Service tax on foreign services held unsustainable where binding precedent covered the demand and penalties.

Service tax and penalties were stated to be unsustainable on services received from a foreign service provider for the period in question because the demand was covered by the Bombay High Court's ruling in Indian National Shipowners Association and the Supreme Court's dismissal of the Revenue's appeal. The Revenue accepted that the issue was so covered, and a later order in the assessee's own case had also dropped similar proceedings for a subsequent period. On that basis, the demand and penalties were not sustained and the appeal was allowed.

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Issues: Whether service tax and penalties were sustainable on services received from a foreign service provider for the period 13.02.2004 to 23.09.2005.

Analysis: The demand was stated to be covered by the decision of the Bombay High Court in Indian National Shipowners Association and by the dismissal of the Revenue's appeal by the Supreme Court. The Revenue fairly accepted that the issue stood covered by those decisions, and the subsequent order in the assessee's own case had also dropped similar proceedings for a later period.

Conclusion: The demand and penalties were not sustained, and the appeal was allowed.

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