The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service tax cannot be levied on the receiving consulting engineers service from the overseas service provider.
Kerala State Electricity Board, the respondent-assessee had entered into a contract with SNC Lavalin, Canada to implement a project work and received ‘Consulting Engineer Service’ from the overseas firm and paid consultancy charges to them.
The revenue appealed against the order passed by the Commissioner of Central Excise, Customs & Service Tax (Appeals), Cochin for confirming the granting of a refund claim of Rs.1,42,48,182/- on 08.01.2010.
Dyamappa Airani, the counsel for the department contended that the service tax paid by the assessee on receiving ‘Consulting Engineer Service’ from the overseas firm namely SNC Lavalin, Canada during the period August 1998 to September 2002 was erroneous and the allowance of refund claim was not as per the law and liable to be deleted.
None appeared on behalf of the assessee during the hearing of the appeal.
The Bench observed that the Commissioner (Appeals) allowed the refund claim by setting aside the order of the adjudicating authority relying upon the judgment of the Larger Bench of the Tribunal in the case of Hindustan Zinc Ltd Vs. CCE and the Commissioner (Appeals) have traveled beyond the authority vested in him and the Order was against the judicial discipline.
The two-member bench comprising D M Misra (Judicial) and Pullela Nageshwara Rao (Technical) held that the order passed by the Commissioner (Appeals), which was contrary to the Judgment of the Supreme Court cannot be sustained and quashed the granting of the refund claim and also held that the service tax leviable on the transaction between the respondent and the overseas service provider.
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