Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2015 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (2) TMI 392 - AT - Service TaxReceipt of services from abroad - sales promotion and marketing activities - Penalty u/s 77 & 78 - Suppression of facts - Bar of limitation - Held that:- From the agreement dated 03/01/2008 with MBT International Inc., USA it is clear that the said agreement was for market promotion of the services rendered by the appellant who is situated in India. Such sales promotion and marketing activities fall within the definition of 'business auxiliary services' which was taxable from 2003 onwards - A perusal of the section 66A makes it absolutely clear that the service tax liability is attracted when taxable services are received from a foreign service provider and the service recipient is situated in India and has its fixed establishment/permanent residence in India. - the liability to service tax on the consideration paid for the services received for the period on or after 18/04/2006, is beyond challenge and if there is a delay in payment of such service tax, the appellant would be liable to pay interest thereon on the service tax liability. Consequently, the demand of service tax in respect of 'business auxiliary services' received for the period 2006-07 has to be upheld and this amounts to ₹ 2,69,94,321/- and interest liability therein works out to ₹ 1,48,95,196/-. The demand for the period prior to 18.04.2006 is not sustainable in law in view of the decision of the hon'ble Bombay high Court in the case of Indian National Shipowners' Association [2008 (12) TMI 41 - BOMBAY HIGH COURT]. Extended period of limitation - Held that:- It is a fact on record that the appellant did not disclose this information in the ST-3 returns filed. The contention of the appellant that there was no specific column for declaration of the amounts paid lacks merits for the reason that the appellant has to declare the amounts received as the amounts billed or charged as the appellant is deemed as a service provider. Even otherwise, the appellant could have disclosed this information in the return with suitable remarks in this regard. Therefore, the non-disclosure of the details of the transaction in the ST-3 returns in spite of specific statutory mandate in this regard clearly amount to suppression of facts. Court have perused the balance sheets and the balance sheets do not reflect the payments made for the various transaction separately. It only gives the gross amount of the expenditure incurred in terms of foreign currency. From that information it cannot be gathered, for what purpose the expenditure was incurred, whether it was for a taxable service or otherwise. Therefore, unless the details of the expenditure incurred are given, it is not possible to make any conclusion one way or other. It is on record that the appellant had not provided copy of the agreement to the department in respect of the services received from abroad and these were provided only in 2010 when the investigation commenced. Further, the exact details of the payments made in respect of the marketing promotion activities were given to the department for the first time only in January 2011 vide letters dated 05/01/2011 and 07/01/2011. The show cause notice has been issued on 24/04/2011 and, therefore, it cannot be said that the show cause notice is barred by limitation of time. Wavier of penalty u/s 80 of the Finance Act, 1994. In the present case also, since clarity on the matter came with the decision of the hon'ble Bombay High Court in the case of Indian National Shipowners' Association (supra), the benefit of doubt could be extended to the appellant for non-disclosure of the information at the relevant time. Therefore, invoking the provisions of Section 80, we waive the penalty imposed on the appellant under Sections 76, 77 and 78 of the Finance Act, 1994. - Decided partly in favour of assessee.
|