Judgment:
Per P.K. Das
These appeals are arising out of a common order and, therefore, all are being taken up together for disposal.
2. After hearing both sides and on perusal of the records, we find that the assessee entered into a Joint Venture agreement with M/s. TRW Inc., USA, who will provide technical know-how to the assessee. As per agreement, the assessee paid technical know-how fees and royalty to foreign company. The original authority confirmed the demand of service tax of Rs.17,64,295/- and imposed penalty under the category of Consulting Engineer on service rendered by the foreign company during the period 07.07.1997 to 23.02.2001. Commissioner (Appeals) modified the adjudication order insofar as allowing the decution of cost drawing from the taxable value and reduced demand of tax to Rs.16,78,182.00. Hence the assessee and the Revenue filed the appeals.
3. We find that the Hon’ble Bombay High Court in the case of Indian National Shipowners Association Vs Union of India [2009 (13) S.T.R. 235 (Bom.)] held that recipient in India liable to service tax for service received from abroad only from 18.04.2006 after enactment of Section 66A of Finance Act, 1994. We find that in the present case the assessee received service from the foreign company prior to 18.04.2006 and the demand of tax and penalties are not sustainable.
4. In view of the above discussions, the impugned order is set aside and the appeal filed by the assessees is allowed. The appeal filed by the Revenue is dismissed.