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2014 (7) TMI 627 - CESTAT AHMEDABADReverse charge mechanism - Section 66A of the Finance Act 1994 - services received and consumed outside India - services for Foreign Currency Term Loan - Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 - Amount of tax paid with interest before issuance of SCN - Held that:- foreign service providers have provided to the appellant taxable service as defined in section 65(105)(zm), which falls under third category of services contained in Rule 3 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. According to these Rules, if the services specified therein are received by a recipient located in India for use in relation to business or commerce, then these services are deemed to have been provided from outside India and received in India. It is further observed that the place of receiving/consuming service is immaterial. Evidently, the appellant (recipient) is located in India and has used the services of foreign service-providers in relation to their business or commerce in India. - the services are taxable - decided against the assessee. Levy of penalty - revenue neutral situation - Held that:- when the situation is revenue neutral and the appellant manufacturer is entitled to CENVAT Credit, it cannot be said that there was an intent to evade duty and extended period can be invoked. - penalty imposed on the appellant cannot be sustained - decision in the case of of M/s Enercon India Ltd. Versus CCE Daman [2012 (7) TMI 196 - CESTAT, AHMEDABAD] followed - appellant’s case is fully covered by the provisions of Section 73(3) of the Finance Act, 1994 and the Revenue should not have issued show casue notice to the appellant for imposition of penalty. - Decided in favour of assessee.
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