COMMISSIONER OF CENTRAL EXCISE Vs. KANSAL HOSIERY EXPORTS

JUDGEMENT

(1.) The short issue raised in the instant appeal preferred by the Revenue is "what is the effect of implementation of Section 66 A in the Finance Act, 1994". It was by the aforesaid provision that the service tax was levied. The provision was introduced on 18.4.2006. The Tribunal by placing reliance on a judgement of the Bombay High Court in the case of Indian National Shipowners Association v. Union of India, 2009 13 STR 235has held that any transaction prior to 18.4.2006 will not be exigible to the service tax and accordingly accepted the appeal of the assesseerespondent by holding that even Special Leave to Appeal (Civil) No. 18932 of 2009 has been dismissed on 14.12.2009, against the judgement of the Bombay High Court in the case of Indian National Shipowners Association .

(2.) We have heard Mr. H.P.S.Ghuman, learned Senior Standing Counsel (Indirect Taxes) and has confronted him with the view taken by the Division Bench of the Bombay High Court as well as the judgement of this Court in the case of Commissioner of C.Excise, Ludhiana v. Bhandari Hosiery Exports Ltd.,2010 18 STR 713. The learned counsel has not been able to highlight any distinguishing feature between the case in hand and the one decided by the Division Bench of the Bombay High Court or this Court in the case of Bhandari Hosiery Exports Ltd. . The view of the Division Bench of this Court is discernible from para 4 of the judgement which reads thus:

(3.) The facts of the present case reveal that the material period involved in the instant appeal is 9.7.2004 to 18.1.2006 when the assessee had paid Rs. 74,83,295/- to Non-resident Service Providers and a show cause notice for recovery of service tax amounting to Rs.7,20,822/- alongwith interest under Section 73 read with Section 75 of the Act was issued with a proposal to impose penalty under Sections 76, 77 and 78 of the Act. The case was adjudicated by the Joint Commissioner Central Excise, Commissionerate, Ludhiana and the Adjudicating Authority affirmed the aforesaid demand and also imposed penalty. The assesseerespondent filed an appeal with the Commissioner (Appeals), Chandigarh which was rejected vide order dated 3.8.2007. On further appeal to the Customs, Excise and Service Tax Appellate Tribunal the assesseerespondent succeeded as it placed reliance on the judgement rendered in the case of Indian National Ship Owners Association , against which SLP has been dismissed, holding that the party was not liable to pay service tax on the service provided to them by the Non-resident prior to insertion of Section 66A in the Act i.e. 18.4.2006. The view of the Division Bench of this Court in the case of Bhandari Hosiery Exports Ltd. and that of the Bombay High Court in Indian National Shipowners Association's case put the matter beyond any doubt. Any service provided to the assessee- respondent by Non-resident prior to insertion of Section 66A of the Act was not exigible to service tax. Accordingly the appeal of the revenue is without any merit and does not warrant admission. Dismissed.