Oio no. 56/JC/2011 Dated

DISCUSSION AND FINDINGS:

17. I have carefully gone through the facts of the case on record including the show cause notice and the various defence replies. I find that the noticee had imported machineries which were installed/ commissioned by technicians of the suppliers who were not having office/establishment in India, before 16.04.06. It appeared that the services provided falls under taxable service of "Erection, Commissioning or Installation, as defined in Section 65 (39a) of the Finance Act, 1994. It appeared that the noticee being a service recipient was liable to pay tax on the services received as provided under Rule 2 (1) (d) (iv) of the Service Tax Rules, 1994.

18. It is seen that the period of provision of service was prior to the period 18.4.2006. The issue whether the tax liability on taxable services provided by a non resident or a person located outside India to a recipient in India on reverse charge basis is applicable from 1.1.2005 or from 18.4.2006 has been clarified by the Board instruction from file no F.No 276/8/2009-CX 8A dated 26.9.2011:
“Sub: Applicability of service tax on taxable services provided by a non-resident or a person located outside India to a recipient in India-reg.
Kind attention is invited to instruction F No. 275/7/2010-CX8A, dated 30.6.2010, wherein the Board had communicated its view that services tax on a taxable service received in India, when provided by a non-resident/person located outside India, would be applicable on reverse charge basis with effect from 1.1.2005, and that the ratio of judgement in M/s Indian National Shipowners Association (INSA) case [2009 (13) STR 235 (Bom)] would not apply to such cases. Further, direction was issued to field formations to defend the levy of service tax on such services for the period on or after 1.1.2005, as post INSA judgment, it has been held by the High Courts/Tribunal in a large number of cases, applying ratio thereof, that service tax on such services is leviable only w.e.f. 18.4.2006. However, the appeals filed by the department before the Hon’ble Supreme Court, for defending the levy of service tax on such services w.e.f. 1.1.2005, have been dismissed recently (subsequent to the issuance of said instruction dated 30.6.2010) in the following cases.

1. 
   SLP (C) No. 29539 of 2010 in CCE Vs Bhandari Hosiery Exports Ltd
   
2. 
   SLP (C)No. 18160 of 2010 in CST Vs Unitech Ltd
   
3. 
   SLP (C) No. 34208/09 of 2010 in UOI Vs S R Batliboi & Co.
   
4. 
   SLP (C)No. 328/332 of 2011 in UOI Vs Ernst & Young
   
5. 
   SLP (C) No. 25687-25688/2011 in CCE Vs Needle Industries
   
6. 
   SLP (C) No. 25689-25690/2011 in UOI Vs SKM Engg Products
   

Further, Review Petition No. 1686 of 2011 filed in the case of Bhandari Hosiery has also been dismissed by the Hon’ble Supreme Court vide order dated 18/8/2011.

2. In view of the aforementioned judgments of the Hon’ble Supreme Court, the service tax liability on any taxable service provided by a non resident or a person located outside India, to a recipient in India, would arise w.e.f. 18.4.2006, i.e., the date of enactment of section 66A of the Finance Act, 1994. The Board has accepted this position. Accordingly, the instruction F No. 275/7/2010-CX8A, dated 30.6.2010 stands rescinded. “

19. As discussed above I find that in this case, the services were provided prior to the period of 18.04.06 i.e. prior to enactment of Section 66A. Hence as clarified by the Board instruction quoted above no demand of service tax arises in this case and the show cause notice needs to be setaside.

20. In view of the above discussion, I pass the following order:

ORDER

I drop the proceedings initiated vide show cause No. V.RJT-II/AR-Morbi/Addl. Commr./100/2007 dated 07.08.2007.

(M. GNANASUNDARAM)

JOINT COMMISSIONER

F. No. V-ST/15-30/ADJ/06

By Reqd. Post AD:

To,

M/s. Antique Granito Pvt. Ltd.,

Lakhdhirpar Road,

Morbi.
Copy to:

(i) The Assistant Commissioner (RRA), Central Excise, HQ, Rajkot.

(ii) The Assistant Commissioner, Central Excise Division-ll, Rajkot.

(iii) The Superintendent, Central Excise AR- Morbi.

(iv) Guard file.

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