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TMI Blog2010 (3) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... nd clearing the same export under bond. The respondents were registered as deemed service provider under Section 68(2) of the Finance Act, 1994 under the category of 'Business Auxiliary Service'. A show cause was issued demanding service tax interest and penalty on the ground that the respondents has incurred Rs.40,66,127/- in foreign exchange towards advertising, publicity and promotion expenses for evaluation of prospective customers situated outside India to M/s. Utmost Foods LCC, Dubai and M/s. LEP International Pvt. Ltd. Australia during the period 2004-05 and 2005-06. The demand was made as service receiver under Rule 2(1)(d) (iv) of Service Tax Rules, 2004 as 'Business Auxiliary Service' provided by a non-resident person providing se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide India, who does not have any office in India, having been specified as taxable service w.e.f.1.1.2005 under Notification No. 36/2004, recipient of such service could not be held liable for paying service tax prior to 1.1.05. Further in the case of M/s. Anant Spinning. Mills Vs. Commissioner of Central Excise, Bhopal reported in 2009 (14) S.T.R. 184 (Tri.-Del.). The Tribunal has held that in view of insertion of Section 66A of the Finance Act, 1994, offshore services cannot be subjected to Service Tax prior o 18.4. 2006. The Tribunal considered the Board Circular on the issue and extract of the same is reproduced here as under:- 6.8 We also noticed that there has been an amendment by way of inserting Section 66A in the Service Tax Provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18.4.2006 after enactment of Section 66A of the Finance Act, 1994. I find that the issue has been decided by the Hon'ble Bombay High Court in the case of Indian National Ship owners Association holding that recipient of service from outside India is liable for service tax only from 18.4.2006 and the same has been confirmed by the Hon'ble Apex Court on 14.12.2009 reported in 2010 (17) STR J57(SC) In the present case, the period involved is prior to 18.4.06 hence the respondent are not liable to pay service tax as demanded in show cause notice as held by the Hon'ble Apex Court. I do not find any force in the argument of the learned DR. Accordingly, the appeals are rejected. (Pronounced in court) (Ashok Jindal) Member (J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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