2010 (1) TMI 1126

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.... Finance Act, 1994 towards service tax apart from the interest chargeable under section 75 of the Finance Act, 1994 and penalty under sections 76 and 78 of the Finance Act, 1994. The petitioner is a dealer in computer software and an authorised dealer of M/s. Abaqus Inc., USA and the sole distributer of the ABAQUS software in India, which is developed only in the United States. Under the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, the second proviso has come into effect by the notification No. 6/2008-ST dated March 1, 2008. Rule 3 provides for taxable service provided from outside India and received in India and states as follows: "Provided further that where the taxable services referred t....

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....service tax is on the persons rendering the services and by making a provision in the Rules, levy of tax cannot be shifted to the recipients of the services and the rule framed, which brought about this situation, has been declared by the Supreme Court to be invalid. The law laid down by the Supreme Court in its judgment in Laghu Udyog Bharati [2005] 1 VST 24; [1999] 115 STC 616; [1999] 112 ELT 365 is squarely applicable to rule 2(1)(d)(iv), which is relied on in this case. It appears that it is first time when the Act was amended and section 66A was inserted by the Finance Act, 2006 with effect from April 18, 2006, the respondents got legal authority to levy service tax on the recipients of the taxable service. Now, because of the enact....