CCE Vs. FRONTIER CYCLE INDS. (P) LTD

JUDGEMENT

(1.) THIS is a Deptt.'s appeal against Commissioner (Appeals) order -in -Appeal No. 282/CE/LDH/08 dt. 26.9.08 by which the Commissioner (Appeals) set aside the service tax demand for the period from 9.7.04 to 31.12.04. The respondent had received the taxable service - Business Auxiliary Service, provided by a service provider not having any office or establishment in India, from an off shore location. The taxable service had been received by the respondent during period from 9.7.04 to 31.5.05. The Department issued a show cause notice for demand of service tax on the payments made by the respondent to the off shore service provider under Rule 2(i)(d)(iv) of Service Tax Rules, 1994. The Asstt. Commissioner vide order -in -original dt. 11.3.08 confirmed the service tax demand of Rs. 18,428/ - alongwith interest at applicable rate and besides this, imposed penalty on the appellant under Section 76, 77 & 78 of the Finance Act, 1994. The Commissioned Appeals) however, set aside the demand from the period from 9.7.04 to 31.12.04 on the ground that the necessary notification under Section 68(2) of the Finance Act making the service receiver in India liable for payment of service tax came into effect only on 1.1.05 and, therefore, the service tax can be demanded only for the period w.e.f. 1.1.05. He also set aside the penalty imposed on the respondent. It is against this order that the Deptt. has filed a present appeal.

(2.) THE respondent has given his written submission and requested for decision of the appeal on merit.