TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 421
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....ufacture of warships of different classes, weapons and other warship equipments. The appellant also import various types of war vessels, warship equipments and weapons systems from the foreign countries. In order to ensure the proper functioning and harmonization of the supplied equipments and weapons with entire system of warships, technical assistance, consultancy is received by the Appellant from the foreign supplier manufacturers. 3. A Show Cause Notice dt. 29.09.2008 was issued to the Appellant by the Revenue alleging that they have received 'Consulting Engineer's Service' in the form of technical assistance from the foreign company/Establishment who has no office or establishment in India and as per the Provisions of Rule 2(1)(d)(iv)....
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....m the persons who are based abroad and does not have any establishment in India. Secondly, it has also been contended that the Department has wrongly classified the service under 'Consulting Engineer's Service' and as per the appellants the proper classification of the services received by them, should have been under category of erection, commissioning or installation services. 5. Heard both sides and perused the records of the appeal. 6. So far as the matter pertaining to payment of Service Tax on Reverse Charge basis is concerned, it is now a settled law that demand of Service Tax before enactment of Section 66 (A) of Finance Act, 1994 is legally not sustainable and therefore, the demand of Service Tax before 18/04/2006 is not recovera....
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....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....
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.... outside India becomes taxable and not service rendered outside India by a person who is non-resident or is from outside India. Therefore, levy of service tax from the members of the Petitioners-association from 1-2-2005 (sic) 1-1-2005 cannot be justified. 19. Then reliance is placed on explanation which is added below Section 65(105). That explanation was added by Finance Act, 2005 with effect from 16-6-2005. That explanation reads as under :- Explanation - For the removal of doubts, it is hereby declared that where any service provided or to be provided by a person, who has established a business or has a fixed establishment from which the service is provided or to be provided, or has his permanent address or usual place of residence,....
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.... declared by the Supreme Court to be invalid. The law laid down by the Supreme Court in its judgment in Laghu Udyog (supra) 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 Finance Act, 2006 w.e.f. 18-4-2006, the Respondents got legal authority to levy service tax on the recipients of the taxable service. Now, because of the enactment of Section 66A, a person who is resident in India or business in India becomes liable to be levied service tax when he receives service outside India from a person who is non-resident or is from outside India. Before enactment of Section 66A it is apparent that there was no authority vested by ....
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.... the form of handing over the technical specifications, suppliers installations diagrams and relevant data for processing of various process for installation of weapons and equipments in the warships which are being manufactured by the Appellant. 8. Before reaching to a conclusion we have also analyzed the definition of "Consulting Engineering Service" given in the Finance Act 1994. The definition for Consulting Engineer Service reads as follows:- "Consulting engineer" means any professionally qualified engineer or any body corporate or any other firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in any manner [to any person] in one or more disciplines of engineering." 9. Going by the terms o....