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2015 (11) TMI 471 - AT - Service TaxDemand of service tax - import of services - reverse charge - payment of arrangement fees, underwriting fees, agency fees and legal fees as also out of pocket expenses - Imposition of penalty - Held that:- Appellant has received the service from consortium of Mandated Lead Managers in respect of facility arrangements in relation to raising of external commercial borrowings - service tax liability on an amount paid to the lead managers i.e. service providers, who have raised the external commercial borrowings in form of external commercial borrowings as to fee of arrangement and underwriting fee plus agency fee is undisputedly taxable under the category of banking and other financial service and taxable as per the provisions of Section 66A of the Finance Act, 1994, in hands of the appellant. To that extent, we uphold the service tax liability and interest thereof. Extended period of limitation and levy of penalty - held that:- appellant is having a good case on the revenue neutrality, inasmuch any service tax paid by them under reverse charge mechanism is eligible as Cenvat credit as the external commercial borrowings are for the purpose of business activity of the appellant. Keeping this in mind, we find that the appellant had made out a case for non-imposition of penalty; invoking the provisions of Section 80 of the Finance Act, 1994, we set aside the penalties imposed on the service tax liability. Inclusion of reimbursement of expenses - Held that:- As regards the service tax liability on an amount paid by the appellant for legal fees and out of pocket expenses, we find that the appellant has not been able to produce any documentary evidence before us to show that these amounts were in fact paid on actual basis. In the absence of any such documentary evidence, we are unable to accept the plea of the appellant. - Matter remanded back - Impugned order is set aside - Decided partly in favour of assessee.
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