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2023 (7) TMI 304 - CESTAT MUMBAIExemption from Service Tax or not - making payment for royalty fee to their group company situated abroad for using their technology, Brand name etc. - applicability of Notification No.17/2004-ST dated 10.09.2004 - reverse charge mechanism - HELD THAT:- Section 66 of the Finance Act, 1994 is the charging Section, which provides that in respect of taxable services mentioned therein, service tax shall be levied and collected in such manner as may be prescribed. Even for the import of service, the service tax has to be levied under Section 66 ibid. Since a deeming fiction was created in Rule 66A ibid, providing for payment of service tax by the recipient of service, such levy is in consonance with the charging provisions contained in Section 66 ibid. Thus, all the provisions of Chapter V of the Finance Act should also be applicable in respect of the service tax paid under Section 66A ibid - In the present case, since the appellant is liable to pay service tax as a recipient of the taxable service, the provision of Section 66 ibid should also be applicable to it. In other words, upon fixing the responsibility for payment of service tax under reverse charge mechanism, no distinction can be placed between the service receiver and service provider for the purpose of Section 66 ibid. Therefore, the benefit of exemption Notification No. 17/2004-S.T., dated 10.9.2004 should also be available to the respondent. The issue before us in the present case has already been decided by the Co-ordinate Bench of the Tribunal in the case of M/S UNITED NEWS OF INDIA VERSUS C.S.T. NEW DELHI [2017 (3) TMI 17 - CESTAT NEW DELHI]. While interpreting the provisions of Section 66A ibid, it has been held that the benefit of the exemption should also be available to the recipient of service. The Hon’ble High Court of Bombay, in the case of Indian National Shipowners Association [2008 (12) TMI 41 - BOMBAY HIGH COURT], had held that the law laid down by the Hon’ble Supreme Court in its judgement in LAGHU UDYOG BHARATI VERSUS UNION OF INDIA [1999 (7) TMI 1 - SUPREME COURT] is squarely applicable to Rule 2(d)(iv), where by issue of notification dated 31.12.2004, any taxable service provided by a person who is a non-resident or is from outside India is notified for payment of service tax by a person who receives such taxable service in India. It was held by Hon’ble High Court of Bombay that the Union of India got the legal authority to levy service tax on the recipients of the taxable service, first time when the Finance Act, 1994 was amended by inserting section 66A through the Finance Act, 2006 w.e.f. 18.4.2006. In other words, it is only after enactment of Section 66A that taxable services received from abroad by a person belonging to India are taxed in the hands of Indian residents. There are no infirmity in the impugned order passed by the Ld. Commissioner of CGST & Central Excise, Thane Rural, Mumbai - Accordingly, the appeal filed by the Revenue is dismissed.
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