2008 (9) TMI 120

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....5-8-2002, that these services were designated as 'consulting engineer's service' by the Department and that service tax of over Rs. 41 lakhs was demanded from the appellants by the lower authorities. Penalties were also imposed on the parties. The lower appellate authority relied on the judgment of the Hon'ble High Court of Kerala in CCE, Trivandrum v. Kerala State Electricity Board - 2006 (3) S.T.R. 625 (Ker.), wherein KSEB, recipient of consulting engineer's service from a Canadian company was held to be liable to pay service tax on the basis of the agreement between the two parties. We are told that the Hon'ble High Court's judgment was affirmed by the apex Court in KSEB v. Commissioner of Central Excise, Trivandrum - 2008 (9) S.T.R. 3 (....

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.... that, in the agreement between KSEB and the Canadian company, there was not even such a provision, but, on the other hand, there was a provision for the Canadian company to discharge service tax liability. According to the learned counsel, this provision was not correctly appreciated in KSEB's case. He would go to the extent of saying that the decision of the Hon'ble High Court of Kerala and that of the Hon'ble Supreme Court in KSEB's case is per incuriam inasmuch as the decision is founded on an erroneous finding of fact. The learned counsel further refers to an earlier judgment of a Larger Bench of the Apex Court, which is Deputy Commercial Tax Officer, Madras v. Sha Sukraj Peerajee - (1968) 21 STC 5 (SC). It is argued that the law laid ....

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....bai-VI - 2006 (3) S.T.R. 397 (Tri.-Mumbai) = 2004 (172) E.L.T. 400 (Tri.-Mumbai) also appears to support the present appellant's case. In that case, the amendments brought to Rule 2(1)(d) of the Service Tax Rules, 1994 as well as the provisions of the agreement between the assessee and the foreign company were examined by the Bench and it was held that the amendments brought to the above rule to make the recipient liable for payment of service could not be extended to tax the assessee for the period prior to the date of amendment. We have heard the learned SDR also, who has heavily relied on the judgments of the Kerala High Court and the Supreme Court in KSEB's case. According to her, the Larger Bench decision of the Tribunal is per incuria....