TMI Blog2011 (1) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... nging the order passed by the Tribunal holding that the service tax liability on the recipient of the services arises only from 18-4-2006 and therefore service tax liability imposed on the assessee from 9-7-2004 to 31-3-2006 was set aside. 2. The assessee is engaged in the activity of receiving taxable services under the category of Business Auxiliary Service as defined under section 65(19) of Finance Act, 1994 (hereinafter referred to as the Act ). In the course of business the assessee had entered into an agreement with Commission agents outside India who marketed/distributed the pharmaceutical products belonging to the assessee during the period from 9-7-2004 to 31-3-2006. For receiving such services the assessee was paying remuneration in the form of commission to the agents outside India. The commission agents/service providers were non-residents or outside India or did not have offices in India. Therefore a show-cause notice was issued calling upon the assessee to discharge the service tax liability. An amount of Rs. 1,19,71,705 was claimed as total value of the taxable service. In addition education cess and interest was also claimed and they were also called upon to sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act the Central Government has notified the tax services for the purposes of cess and also who has pay the said tax. It is specifically stated that any taxable service provided by a person who is not a resident or is from outside India, does not have any office in India, then the recipient of the service in India is liable to pay tax with effect from January, 2005. Therefore the revenue contends that the judgment of the Bombay High Court has no application when substantial power is conferred on the Central Government to issue Notification not only specifying the services which are taxable but also the person who is liable to pay the tax. 5. Per contra, the learned counsel appearing for the assessee relying on the aforesaid judgment of the Bombay High Court contended that the liability to pay service tax on the recipient of the service was imposed for the first time by amending the Act and introducing section 66A. Till such time there was no liability on the recipient of tax as held by the Bombay High Court which has been confirmed by the Apex Court. Section 68(2) did not empower the Central Government by specifying the person who is liable to pay tax and even they have speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 36/2004 S.T., dated 31-12-2004 has been issued not only stipulating the services which are liable for service tax and it also makes it clear that any taxable service provided by a person who is not a resident or is from outside India who is not having any office in India. The said Circular is set out hereunder: (NOTIFICATION NO. 36/2004-S.T., DATED 31-12-2004) Service tax payment in relation to specified services: In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), the Central Government hereby notifies the following taxable services for the purposes of the said sub-section, namely: (A) the services,- (i) in relation to a telephone connection or pager or a communication through telegraph or telex or a facsimile communication or a leased circuit; (ii) in relation to general insurance business; (iii) in relation to insurance auxiliary service by an insurance agent; and (iv) in relation to transport of goods by road in a goods carriage, where the consignor or consignee or goods is, - (a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948); (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely: In the said notification: (a) in paragraph (A), in sub-paragraph (iv), in item (b), for the words established by or under , the words formed or registered under shall be substituted; (b) for paragraph (B), the following paragraph shall be substituted namely: any taxable service provided or to be provided by a person, who has established a business or has a fixed establishment from which the service is provided or to be provided, or has his permanent address or usual place of residence, in a country other than India, and such service provider does not have any office in India. In none of these Notifications the Central Government had specified the person who is liable to pay service tax in the case of a service provider who is residing outside India who has no fixed establishment in India or who has no permanent address in India. However, the Parliament has amended the Act by introducing section 66A by the Finance Act, 2006 which came into effect on 18-4-2006 which reads as under: 66A. Charge of service tax on services received from outside India.-(1) Where any service specified in clause (105) of section 65 is, (a) provided or to be pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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