Schott Glass India (P) Ltd. Vs. Cce - Court Judgment

Excerpt:
1. the dispute in the present appeal is as to whether the appellant is required to pay the service tax on the services received by him from their sister company located in germany. the said services were received by the appellant during the period from nov.'01 to march'02, though the bill for the same was received subsequently in the year 2003 and payments were made thereafter. it is seen that the provisions of rule 2(1)(d)(iv) were made effective w.e.f. 16.8.02 vide notification no. 12/2002-st, dt.8.1.02 providing for payment of tax by a person who is a recipient of taxable services from a person outside india. it is the appellant's contention that since the services were obtained prior to introduction of said rule, they were not taxable and the mere fact that the invoice was raised subsequently and bill was settled thereafter will not change the legal position.2. i agree with above contention of the appellant. sub-clause (iv) to rule 2(1)(d) was effective w.e.f. 16.8.02 and there is nothing in the said rule to suggest that the same would operate retrospectively.admittedly, the services were availed during the period from nov.'01 to march'02. at that point of time, there was no provision for payment of tax by the recipient of services from the foreign country. merely because the payment for such services was raised and settled in sept.'03, can not be made a ground for making the appellant liable to pay tax. for the above proposition, i also relies on tribunal's decision in case of cadbury india ltd. v. cce mumbai . on this short ground itself, i set aside the impugned order and allow the appeal with consequential-relief, without going into the other plea of the service provider not being consulting engineer, as raised by the appellant.

Judgment:
1. The dispute in the present appeal is as to whether the appellant is required to pay the service tax on the services received by him from their sister company located in Germany. The said services were received by the appellant during the period from Nov.'01 to March'02, though the bill for the same was received subsequently in the year 2003 and payments were made thereafter. It is seen that the provisions of Rule 2(1)(d)(iv) were made effective w.e.f. 16.8.02 vide Notification No. 12/2002-ST, dt.8.1.02 providing for payment of tax by a person who is a recipient of taxable services from a person outside India. It is the appellant's contention that since the services were obtained prior to introduction of said rule, they were not taxable and the mere fact that the invoice was raised subsequently and bill was settled thereafter will not change the legal position.

2. I agree with above contention of the appellant. Sub-clause (iv) to Rule 2(1)(d) was effective w.e.f. 16.8.02 and there is nothing in the said rule to suggest that the same would operate retrospectively.

Admittedly, the services were availed during the period from Nov.'01 to March'02. At that point of time, there was no provision for payment of tax by the recipient of services from the foreign country. Merely because the payment for such services was raised and settled in Sept.'03, can not be made a ground for making the appellant liable to pay tax. For the above proposition, I also relies on Tribunal's decision in case of Cadbury India Ltd. v. CCE Mumbai . On this short ground itself, I set aside the impugned order and allow the appeal with consequential-relief, without going into the other plea of the service provider not being consulting engineer, as raised by the appellant.