2018 (8) TMI 1172

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... The assessee is engaged in manufacture of Ceramic Fiber Bulk and Ceramic Fiber Products. They have received Intellectual Property Service from M/s.Morgan Crucible Co.Plc. UK. As per the Know-how Agreement dt.1.2.1995 the assessee paid royalty of 1.3% of the net selling price of Ceramic Fibre Products to Morgan Crucible Co. Plc. UK. Department took the view that assessee is liable to discharge service tax liability under the category of "Intellectual Property Service" under section 65 (55b) read with Section 65 (105) (zzr) w.e.f. 10.09.2004. Two Show cause notices were issued for recovery of a total amount of Rs. 17,99,176/- (Rs.10,95,575 + Rs. 7,03,601) towards service tax demand under reverse charge for the period from September 2004 to D....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the demand of service tax under reverse charge from 1.1.2005. He submits that the Hon'ble Bombay High Court in the case of Indian National Shipowners Association Vs UOI - 2009 (13) STR 235 (Bom.) has held that reverse charge mechanism in terms of Section 66A will be effective only from 18.04.2006. The said decision has been affirmed by the Hon'ble Supreme Court as reported in 2010 (17) STR J57 (SC). The aforesaid judgements have also been followed by Hon'ble Madras High Court in the case of T.Abdul Wahid & Co Vs UOI 2017 (47) STR 123 (Mad.). Department appeal deserves to be dismissed on monetary ground also in the wake of recent Board's Instructions dt. 11.07.2018. iii) As regards imposition of penalty, he submits that, in the event of ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ven during the disputed period. At the same time, the authority has correctly followed the ratio laid down by High Court of Bombay in Indian National Ship Owners Association - 2009 (13) STR 235 (Bom.) to decide that assessee are liable to pay service tax, with interest thereon, on the Royalty charges paid, only w.e.f. 18.04.2006, i.e. after enactment of Section 66A of the Act. The Lower appellate authority has also given further relief to the assessee by setting aside penalty under section 76 ibid. 6. We thus find that the impugned order is just, fair and legally correct. The assessee appeal ST/517/2011 therefore does not hold merit for which reason it is dismissed. 7. For the very same reasons discussed herein above, we are not moved....