TMI Blog2010 (9) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... uram, (2007 -TMI - 2362 - Supreme Court of India), has held that, where the liability to pay service tax is on the Indian company, and the foreign company rendering the service does not have any office in India, the tax was payable by the Indian company and not by the foreign company – Thus impugned order are set aside - matter remanded back - ST/228/06 - WZB/AHD/2010 - Dated:- 29-9-2010 - MRS. ARCHANA WADHWA, MEMBER (J) and MR. B.S.V. MURTHY, MEMBER (TECHNICAL) Represented by Shri P.K. Salve, Adv. for the Appellant. Shri J.S. Negi, SDR for the Respondent. Per: MR. B.S.V. Murthy: The appellant is a company incorporated under the law of Denmark having its principal office at Nymollevej 55, P.O. Box 213. DK 2800 Lyngby, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service tax along with interest and imposed the penalty Rs.100/- per day from the date when the service tax demanded was to be deposited, Rs.1000/- and Rs.64,28,875/- under section 76, 77 and 78 of the Finance Act, 1994, respectively. 4. The learned advocate for the appellant submitted that the findings of the Commissioner are not sustainable on the following grounds: i. Technical and engineering information provided under the agreement is know-how and not engineering consultancy as decided by the Commissioner. In Indian Farmers Fertilizer Coop. Ltd. Vs. CCE, Bareilly, 2007 (5) STR 281 (Tri. Del.), similar transaction of the appellant herein with IFFCO was taxed as consulting engineer s service. In this case, the Hon'ble Tribunal hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Act, 1994. It was the agreement for exploiting its intellectual property by giving it to the appellants. In this commercial transaction, there is no element of any service, much less of engineering consultancy. v. The Commissioner has failed to appreciate that the appellants entered into transaction dealing with property and not for any service. Therefore, no service tax is payable under the agreement. vi. The engineering package was prepared in Denmark and sent to India. The consideration paid for supply of the Engineering design package would amount to sale of goods and not of rendering any service. vii. Even if transfer of know-how is considered as service, the know-how was delivered outside India. The Commissioner has failed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ala State Electricity Board (KSEB) cited above was not under consideration before the Commissioner. In that case KSEB had argued that the service was not provided in India and the service provided did not attract service tax since what was provided was not consulting engineer service. The question of liability of the service provider was not discussed on the ground which was considered by the Hon'ble Supreme Court in the case of Kerala Electricity Board by the Commissioner. The Hon'ble Supreme Court in paras 12 to 17 had discussed the liability of the service provider and the service receiver in that case. 12. Sub-rule (1) of Rule 6 of Service Tax Rules, as applicable at the relevant time, stipulated that in case of a person who was from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16-8-2002 agreement still held good as the service recipient being the appellant had taken up the responsibility of meeting the liability of the foreign company. 15. Clause 16.1 of the contract obligated the foreign company responsible only for filing of returns, estimates, accounts, information and details complete and accurate in all respects as may be required by any law or regulation. Only in the event the foreign company did not comply with the said requirements resulting in imposition of any penalty, interest or additional liability, the same shall be borne by it. Clause 16.1 did not cast any obligation upon the foreign company to make the payment of tax; the same is being the liability of the appellant. 16. Submissions of Mr. Iye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax within the prescribed time. In this case as submitted by the learned counsel, Hon'ble Supreme Court had come to the conclusion that the liability to pay service tax was on the service receiver and therefore the payment of interest also was to be made by the service receiver. 8. In this case show cause notices had been issued to both the appellant (service provider) as well as IOCL the service receiver. The Commissioner has held that IOCL was not liable to pay service tax in view of the absence of statutory provision making the service receiver liable to pay was not in existence. He has also taken note of the clause 4.7.3 of the agreement providing for payment of service tax by M/s. IOCL and of payment of interest and penalties levied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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