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2015 (7) TMI 429 - AT - Service TaxLiability to discharge service tax on amounts which have been remitted by the appellants to foreign entities for the commission on the import of rough diamonds - Bonafide belief - Invocation of extended period of limitation - Held that:- appellants have been taking a consistent plea before the adjudicating authority that they were under a bona fide belief that the writ petition which has been filed by them has been filed by them has been admitted and is still pending, hence they need not discharge any service tax liability. On perusal of the records, we find that factually appellants had filed writ petition on 8.9.2006 and it was admitted by the Hon'ble High Court and departments Affidavit was filed on 29.9.2006, which admitted the contentions that the appellants were engaged in importing of rough diamonds and have paid commission to the brokers through whom they procured diamonds from DTC. If the department was aware of writ petition filed by the appellants and have filed an affidavit in September 2006, nothing prevented them from issuing protective demand notices in order to safeguard the Revenue. Appellants could have entertained a bona fide belief that the constitutional validity having been challenged by them in writ petition and the same being pending before the Hon'ble High Court, they need not pay any service tax on the amount that is remitted to the brokers. This can be bona fide belief of the appellants, accordingly, the demand which has been confirmed against all the appellants by invoking the extended period of limitation are liable to be set aside - demands which are within the period of limitation from the date of issuance to the show cause notice needs to be upheld with interest and we do so, to that extent appeals are rejected. - Decided partly in favour of assessee.
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