TaxTMI 
TaxTMI 
2009 (10) TMI 265
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....r Supply and registered under Service Tax for the taxable services namely, Management, Maintenance or Repair Services. On gathering intelligence that M/s. APC had failed to pay Service Tax on the payments made for obtaining the technical know-how from M/s. American Power Conversion, West Kingston, Rhode Island, USA, the officers of the anti-evasion wing of the Service Tax Commissionerate, Bangalore initiated certain enquiries. The technical know-how/royalty agreement entered with the foreign company obligated by M/s. APC India Ltd. to pay certain amount towards royalty based on the sales turnover of the products manufactured relating to the know-how transferred. The services so provided by the foreign company in the engineering discipline related to the advice, consultancy and technical assistance which appeared to be classifiable under the category of Consulting Engineer Services. M/s. APC appeared to be liable to pay Service Tax under the aforementioned category in terms of rule 2(1)(d)(iv) of Service Tax Rules, 1994 from 16-8-2002 to 9-9-2004. 2.1 License Agreement entered with the foreign company provided for non-exclusive right and license to make, use, offer for sale and s....
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....c) Interest should not be demanded from them under the provisions of section 75 of the Act, for the delayed payment of the service tax as at Sl. Nos. (a) and (b) above; (d) Penalty should not be imposed on them under the provisions of section 76 of the Act for their failure to pay Service Tax in the manner prescribed under section 68 of the Act, read with rule 6 of the Service Tax Rules, 1994; (e) Penalty should not be imposed on them under the provisions of section 77, of the Act for their failure to obtain service tax registration under section 69 of the Act read with rule 4 of the Rules, under the category of 'Consulting Engineer' service and 'Intellectual Property' service and also for their failure to file the ST-3 returns in the manner prescribed under section 70 of the Act read with rule 7 of the Rules; and (f) Penalty should not be imposed on them under the provisions of section 78 of the Act for suppressing the value of the taxable service and contravention of the provisions of the Act, with an intent to evade payment of Service Tax. 2.3 The appellant/assessee contested the entire show-cause notice vide their reply dated 16-1-2008 and did not agree to any of th....
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....n the classifications of the services were to be under "Consulting Engineer Services". 3. Learned Counsel appearing on behalf of the appellant/assessee would submit that the entire case of the Revenue is that during the period 10-9-2004 to 31-3-2005, the appellant is liable to pay the service tax liability on the amount paid as service tax to the foreign party only on the ground that the foreign party does not have an office in India and the appellant being the recipient of the services is liable to discharge the service tax liability. He would submit that the issue is now decided in favour of the respondent as the Hon'ble High Court of Bombay in the case of Indian National Shipowners Association v. UOI [2009] 18 STT 212 has clearly laid down a law, which is that as a recipient of the services, an assessee is liable to discharge service tax liability only from 18-4-2006. It is the submission, that in revenue's appeal the period involved is from 16-8-2002 to 9-9-2004. Hence, that period is also covered by the decision of the Hon'ble High Court of Bombay. He would submit that this view is taken by this Bench in the cases of ABB Ltd. and Micro Lab Ltd. vide [Final Order Nos. 1063 &....
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....ovision the recipient of the service became liable for paying the service tax provided the service was received in India. The entire case of the petitioners is in relation to the service received by the vessels and ships owned by the members of the petitioner-association outside India. Therefore, it cannot be said that on the basis of rule 2(1)(d)(iv), service tax can be levied on the members of the petitioners-association. It is further to be seen here that section 64 gives powers to the Central Government to make Rules for carrying out the provisions of the Chapter. The Chapter relates to taxing the services which are provided, the taxing on the value of the service and it is only the person who is providing the service can be regarded as an assessee. The Rules therefore, cannot be so framed as not to carry the purpose of the Chapter and cannot be conflicted with the provisions in Chapter V of the Act. In other words, as the Act makes the person who is providing the service liable, the provisions in the Rules cannot be made which makes the recipient of the service liable. It is, thus, clear that the provisions of rule 2(1)(d)(iv) are clearly invalid. ** ** ** 21. In the res....