CCE Vs. BHANDARI HOSIERY EXPORTS LTD.

JUDGEMENT

(1.) Heard both sides.

(2.) REVENUE filed this appeal against the impugned order whereby demand for extended period and penalties were set aside. The assesses M/s. Bhandari Hosiery Exports Ltd. also filed a cross objection challenging the demand confirmed in the impugned order.

(3.) BRIEF facts of the case are that assesses are engaged in the manufacture of hosiery goods. The assesses are also getting export orders. The assesses availed services of individual overseas commission agent under auxiliary services. Show cause notice was issued for demand of service tax for the period from 9.7.2004 to February, 2006 on the ground that the assesses being recipient of services of commission agent from the person who is residing outside India is liable to pay the service tax as recipient of commission agent's services. The adjudicating authority confirmed the demand and imposed the penalty. The Commissioner (Appeals) on appeal, filed by the assesses set aside the demand which is beyond the normal period of limitation and also set aside the penalty. Contention of the assesses is that the period for demand is from 9.7.2004 to February, 2006 and Section 66A was introduced w.e.f. 18.4.2006 by Finance Act, 2006 vide which services rendered outside India are made liable to service tax. Contention is that prior to introduction of Section 66A of the Finance Act, services rendered outside were not taxable under the Finance Act. Contention is that since the demand in this case is for the period prior to introduction of Section 66A, hence, not sustainable. The assesses relied upon the decision of the Tribunal in the case of Foaster Wheeler Engg. Ltd., reported as 2007 (7) STR 443 for the proposition that services provided outside India are liable for service tax w.e.f. 18.4.2006 with introduction of Section 66A of the Finance Act.