1 abs IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 1253 OF 2009 A.C. Nealsen Org-Marg Pvt. Ltd. & Anr. .. Petitioners V/s Union of India & Ors. .. Respondents Mr. Jimmy Pochkhanwala, Senior Advocate i/b Mr. Aditya Chitale for the Petitioners. Mr. A.S. Rao for the respondents. CORAM : F.I. REBELLO & D.G. KARNIK, JJ. DATE : 22ND JULY 2009 P.C. : 1. Rule. Heard forthwith. 2. Considering the judgment of this Court in Indian National Shipowners Association v. Union of India, Writ Petition No.1449 of 2006 decided on 11th December 2008 (TIOL-633-HC-MUM-ST), the learned Tribunal has misdirected itself in law in not granting waiver insofar as demand of service tax with interest payable thereon is concerned. In para 17 of the judgment, this Court has observed as under: 2 “17. Reliance is placed on the provisions of Rule 2(1)(d)(iv) quoted above for justifying the levy of service tax for the period from 16-8-2002. Perusal of the above quoted Rule 2(d)(iv) shows that by that provision a person liable for paying the service tax was defined to mean in relation to any taxable service provided by a person who is non-resident or is from outside India to a person receiving taxable service in India. Apart from the fact that this rule is contrary to the provisions of Section 68 and other provisions of the Act, under this provision the recipient of the service became liable for paying the service tax provided the service was received in India. The entire case of the Petitioners is in relation to the service received by the vessels and ships owned by the members of the Petitioner-association outside India. Therefore, it cannot be said that on the basis of Rule 2(1)(d)(iv), service tax can be levied on the members of the Petitioners-association. It is further to be seen here that Section 64 gives powers to the Central Government to make rules for carrying out the provisions of the Chapter. The chapter relates to taxing the services which are provided, the taxing on the value of the service and it is only the person who is providing the service can be regarded as an assessee. The rules therefore, cannot be so framed as not to carry the purpose of the Chapter and cannot be conflicted with the provisions in Chapter V of the Act. In other words, as the Act makes the person who is providing the service liable, the provisions in the Rules cannot be made which makes the recipient of the service liable. It is thus clear that the provisions of Rule 2(1)(d)(iv) are clearly invalid.” 3 Para 21 of the judgment is also relevant, which reads thus:- “21. In the result, therefore, the petition succeeds and is allowed. Respondents are restrained from levying service tax from the members of the Petitioners-association for the period from 1-3-2002 till 17-4-2006, in relation to the service received by the vessels and ships of the members of the Petitioners- association outside India, from persons who are non-residents of India and are from outside India.” 3. Once this Court lays down the law that the recipient of the service is not liable for paying service tax, that law is binding on all Tribunals and Authorities functioning within the jurisdiction of this Court. 4. In the light of the above, the impugned order to the extent it has not granted waiver of pre-deposit of the amount of service tax with interest payable thereon is set aside. The appeal to proceed without any pre-deposit. 5. Rule is made absolute accordingly with no order as to costs. (D.G. KARNIK, J.) (F.I. REBELLO, J.)