TMI Blog2011 (6) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... does not have any office in India ? 2. Heard leaned counsel Mr.Y.N.Ravani, who has strenuously argued this case of the Department and also emphasized on the material placed before this Court for consideration of the issues proposed. The facts in capsulized form can be read thus: 3. Assessee-respondent is engaged in the manufacture of Ball and Roller Bearing. Assessee use Brand name FAG in pursuance to user agreement entered into by it with M/s. FAG OEM Und Handel AG, for receipt of know-how for manufacture of Ball Roller Bearings. It is the stand of the Department that services received by the assessee are liable to service tax under the Franchise Services 4. Resultantly, the Department issued Show Cause Notice to bring t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified in clause (105) of section 54 is, -- (a) 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 (b) received by a person (hereinafter referred to as the recipient) who has his place of business, fixed establishment, permanent address or usual place of residence, in India, such service shall, for the purpose of this section, be the taxable service, and such taxable service shall be treated as if the recipients had himself provided the service in India, and accordingly all the provisions of this Chapter shall apply:Provided that where the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that before enactment of Section 66A of the Finance Act, 1994 there was no authority vested by law in the respondent to levy service tax on a person who is resident in India but who receives services outside India. It was observed that law laid down by the Apex Court in case of Laghu HC-NIC (iv) in relation to 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, the person who receives such service and has his place of business, fixed establishment, permanent address or, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes of this clause. However, in absence of any charging Section the Court was of the opinion that merely by virtue of provisions contained in Rule 2 (1) (d) (iv) in the Service Tax Rules, recipient of service tax could not be made liable to pay the tax. It is of course true that in the concluding portion, the Bench observed that the person who receives service outside India from a person who is non-resident cannot be made to pay service tax. To our mind, however, this is not the ratio of the decision and the entire decision is based on the ratio laid down by the Apex Court in the case of Laghu Udyog Bharti (Supra). Bombay High Court's observations relevant for our purpose may be noted thus: 20. It appears that a similar pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able was the one who rendered the services. In other words, it is only after enactment of Section 66A that taxable services received from abroad by a person belonging to India are taxed in the hands of the Indian residents. In such cases, the Indian recipient of the taxable services is deemed to be a service provider. Before enactment of Section 66A, there was no such provision in the Act and therefore, the Respondents had no authority to levy service tax on the members of the petitioners association. We also notice that Delhi High Court in case of Unitech Ltd., (supra) relying on decision of the Bombay High Court in the case of Indian National Shipowners Association (Supra), deleted the tax demand from assessee who was a recipient of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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