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2022 (5) TMI 429 - AT - Service TaxLevy of service tax - import of service - Business Auxiliary Services - appellant had entered into a Sales Commission Agreement for operational responsibility regarding sales management, key account responsibility, creditor handling, business development and marketing of the appellants’ product - service received from the parent company located abroad - reverse charge mechanism - period from 01/01/2005 to 15/06/2005 - HELD THAT:- The learned adjudicating authority has confirmed the service tax demand under the taxable category of BAS, holding that the appellant should be liable to pay service tax for the period from 01/01/2005 to 15/06/2005 as a recipient of such service, received from the parent company located abroad, under reverse charge mechanism. For demanding service tax amount, the impugned order has referred to Rule 2(1)(d)(iv) ibid. The issue in dispute came up for consideration before the Hon’ble Bombay High Court, in the case of INDIAN NATIONAL SHIPOWNERS ASSOCIATION VERSUS UNION OF INDIA [2008 (12) TMI 41 - BOMBAY HIGH COURT], wherein it was held that provisions of Rule 2(1)(d)(iv) ibid cannot create any tax liability which is not authorized by law and that before insertion of Section 66A with effect from 18/04/2006, there was no authority to levy service tax on import of service. It has further been held that Explanation below Section 65(105) ibid did not give any authority to levy service tax on import of service. There are no merits in the impugned order, insofar as it has confirmed the adjudged demands on the appellant - appeal allowed - decided in favor of appellant.
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