JUDGMENT N. Kumar, J.—The Revenue has preferred these two appeals challenging the order passed by the tribunal holding in one appeal that there is no liability of service tax prior to 18-4-2006 and in the second that, the penalty imposed for the period prior to 18-4-2006 cannot be sustained. 2. The assessee is a wholly owned 100% subsidiary of Metro Cash and Carry, Germany, and operates cash and carry distribution centres in India. MCC, Germany is the management entity for ail cash and carry activities of Metro group worldwide. MCC, Germany is the proprietor of the trademark, service mark, brand name 'Metro'. MCC India, i.e., the assesses has entered into a License Agreement dated 4-10-2001 with MCC Germany wherein MCC Germany granted rights to use the trademarks and rights to use the proprietary know-how in managing cash and carry business in India. Under the terms of the agreement, the assessee is required to pay an annual royalty equal to an amount of 1% of the assessee's net annual proceeds on sales of goods. The revenue proceeded on the ground that this royalty, which has been paid by the assessee to MCC, Germany would fall under the category of services rendered by franchise service under Section 65(47) of the Finance Act, 1994 as granted by Finance Act, 2005. A show cause notice came to be issue to the assessee and after hearing the assessee, the Adjudicating Authority confirmed the demands, imposed penalties and also sought for recovery of interest. 3. Aggrieved by the said order, the assessee preferred an appeal to the tribunal, relying on the judgment of the Bombay High Court in the case of Indian National Shipowners Association Vs. Union of India, (2009) 222 CTR (Bom) 234 which was affirmed by the Apex Court by contending that the tax payable is only from 18-4-2006 and they are not liable to pay any tax for the period anterior to the same. The tribunal held that though the question involved in the appeal is whether the services rendered by MCC Germany to the assessee would fall under the category of franchise service and in the said service for which the assessee as a recipient is liable to pay the said service liability, he did not proceed to decide the said issue on merits. As under the Act, the liability to pay the service tax by the recipient in respect of service received from a service provider who is outside the country and who has no establishment in India is only from 18-4-2006, the period is in question. Therefore, relying on the judgment of the Bombay High Court, which was affirmed by the Apex Court, the liability is only after 18-4-2006 and no liability could be foisted earlier to this period. Therefore, it set aside the impugned order, both the demands as well as the liability. Aggrieved by the said order of the tribunal, the revenue is in appeal. 4. The learned counsel for the revenue contended that the tribunal committed a serious error in not deciding the appeal on merits. It is an appeal preferred by an assessee. Therefore, the order impugned requires to be set aside and the matter is required to be remanded back to the tribunal for fresh consideration and for a decision on merits. It is only, thereafter, it would be appropriate to find out whether the tax is payable anterior to 18-4-2006 or not. Therefore, he submits that the order requires interference and a remand to the tribunal. Even otherwise, he contends that in view of Notification 36 of 2004 read with Rule 2(1)(d)(iv) of the Service Tax Rules, the liability to pay service tax would be with effect from 1-1-2005 and therefore, even on that score, the impugned order requires interference. 5. Section 68(1) of the Act reads as under: Section 68(1) provides that every person providing taxable service to any person shall pay service tax at the rate specified in Section 66 in such manner and within such period as may be prescribed. Therefore, the liability to pay the service tax is on the provider of service. If the said provider of service is not within the country and he has no place of business within the country, the service provider has no liability to pay the tax. However, Section 68(2) provides that notwithstanding anything contained in sub-section (1), the Central Government by issue of a notification in the official gazette can stipulate who should pay the service tax other than the service provider. It is in exercise of power vested in the Central Government under sub-section 2 of Section 68. Hence, in this regard, Notification No. 36/2004 is issued. It is in exercise of power vested in the Central Government under sub-section 2 of Section 68. Hence, in this regard, Notification No. 36/2004 is issued. In fact, there is an amendment to that notification. By way of notification No. 9/06 and yet another amendment by way of Notification No. 24/05 and also 10/06, in one of these notification issued, the Central Government has specifically states that the recipient of the service is liable to pay tax. It is in this background, it is necessary to see what the parliament did. Probably after noticing this loophole, they have amended the Act by Finance Act, 2006, which came into effect from 2006 providing for the recipient of such service as the person liable to pay the service tax. 6. This provision and the notifications came up for consideration before the Bombay High Court in the case of Indian National Ship Owners Association vs. Union of India, 2008 TIOL 633 High Court-MUM-ST : 2009 (13) S.T.R. 235 (Bom.). It was declared that notwithstanding the aforesaid notifications, the liability to pay service tax by the recipient of service is only from 18-4-2006, which judgment has been affirmed by the Apex Court. It is that judgment, which is followed by the tribunal. We are in agreement with the said view expressed by the Bombay High Court, which has been rightly followed by the tribunal. In that view of the matter, we do not see any justification in these two appeals and accordingly, these two appeals are dismissed.