TMI Blog2010 (10) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - Also taken note of the clause of the agreement providing for payment of service tax by M/s. IOCL and of payment of interest and penalties levied on HTAS by Indian Tax authorities is to be paid by M/s. IOCL but held that it is for the parties to enforce the contract and such a clause cannot do away with the liability of HTAS on this account - The decision of Hon’ble Supreme Court or the Hon’ble High Court of Kerala was not available during relevant time, the issue needs to be reconsidered by the Commissioner - The fact that the decisions in the case of Indian Farmers Fertilizers Co-operative Ltd., All India Federation of Tax Practitioners were also not available and the other decision cited by the learned advocate were also not available during the relevant period – Thus set aside the impugned order, and remand the matter to the Commissioner for fresh adjudication after giving the concerned parties fresh opportu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmers Fertilizer Co-operative Ltd. v. CCE [2007] 6 STT 283 (New Delhi - CESTAT), similar transaction of the appellant herein with IFFCO was taxed as consulting engineer s service. In this case, the Hon ble Tribunal held that supply of know-how as intellectual property was not taxable as consulting engineer s service. Only the amount received towards technical assistance in India would be taxable. In the case of the appellant, no amount was received for technical assistance in India. Therefore, the activities of the appellant were not taxable in the first place. (ii) Under the agreement (Clause 4.7.3 - Page 88 - of the Appeal Memo), IOCL was required to pay service tax. The Supreme Court in Kerala State Electricity Board v. CCE [2007] 11 STT 487, 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. The appellant is not having any office in India. Therefore, it is not required to pay service tax. (iii) The services have been rendered outside India. In All India Federation of Tax Practitioners v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussed in detail as to how and why the services provided by the appellant amounts to consulting engineer service. 6. We have considered the submissions made by both the sides. We consider that it would not be necessary to go into all the detailed arguments presented by both the sides in view of the fact that the decision of the Hon ble Supreme Court in the case of Kerala State Electricity Board (supra) cited above was not under consideration before the Commissioner. In that case Kerala State Electricity Board (supra) 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 State Electricity Board (supra) 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 outside India and did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt itself was liable for payment of tax, it was also liable for payment of statutory interest thereupon, if the same had not been deposited within the time stipulated by the statute. The liability to pay tax was not on the foreign company. Only on default on the part of the appellant the interest was leviable. Appellant was clearly liable therefor. In other words, the liability being that of the appellant, it must accept the liability of payment of interest leviable thereupon in terms of statute occasioned by the breach on its part to deposit the amount of tax within the prescribed time. 17. Proviso appended to Rule 6 which has been inserted with effect from 28-2-1999 cast a liability upon a person authorized by the foreign company to do it in that behalf. The details were to be furnished by a person who was authorized. Clause (2) of the proviso provides for submission of the demand draft within 30 days from the date of raising the bill. Appellant being the person authorized to make payment of the service tax, section 75 would come into operation in the event of its failure to do so. 7. The observations of the Hon ble Supreme Court In other words, the liability being th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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