- (1.) Leave granted. A limited notice was issued to the effect as to whether the appellant Kerala State Electricity Board, the service recipient, within the meaning of provisions of Finance Act, 1994, levying service tax, is liable to pay any interest on the amount of tax due to the respondent.
(2.) The question involved in this appeal arises out of a judgment and order dated 25.7.2006 passed by a Division Bench of the High Court of Kerala at Ernakulam whereby the appeal filed by the respondent herein from the judgment and order of the Customs Excise & Service Tax Appellate Tribunal, Circuit Bench at Cochin in Final Order No.477 of 2005, Appeal No.ST/36/2004 was allowed.
(3.) The basic fact of the matter is not in dispute. Appellant herein entered into an agreement with M/s. SNC Lavlin Inc. Montreal, Canada (Foreign company) in relation to various projects for obtaining consultancy services from them. The relevant clauses of the said agreement are as under :- "16.1 SNC Lavaline and all its expatriate personnel shall be responsible for timely and prompt filing of all returns, estimates, accounts, information and details complete and accurate in all respects as may be required under the applicable laws/regulations in India before the appropriate authorities in India. In case SNC Lavaline or any of its expatriate personnel do not comply with the above tax requirements, which results in any penalty, interest or additional liability, the same shall be borne by SNC Lavaline. 16.2 SNC Lavaline shall provide KSE Board the relevant orders/notices of demand, invoices, appellate orders and other relevant information as the proof of the actual tax liability to be borne by KSE Board, sufficiently in advance to enable KSEB to take appropriate action in this connection. 16.3 SNC Lavaline and its expatriate personnel, if required by KSEB, shall contest appeals against any assessment/demand of an appropriate authority before such authority at the request of and cost expenses of KSEB".;