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2015 (11) TMI 1049 - AT - Service TaxImport of services - Arrangement Fees and Agent's Bank fees - Amount paid to Mandated Lead Arrangers (MLAs) to procure lenders/lender syndicate for the appellant. - services have been received by the appellant-assessee beyond the Indian Territory - Invocation of extended period of limitation - Imposition of penalty u/s 76 & 78 - Held that:- On a careful reading of clause (a) & (b) of Section 66A, it is quite clear that when the service provider is from outside India and the recipient of the service who has his place of business, fixed establishment, permanent address or usual place of residence in India, then the recipient of such service will be liable to pay service tax. This is also clear from the reading of Rule 3(iii) of Taxation of Services (Provided from Outside India & Received in India) Rules, 2006. Recipient of services is the appellant located in India. - money was received by the appellant. The fact that this money was used abroad to acquire certain assets will not make any difference. Location of assets, procured as a result of receiving the money which in turn was consequent to the receipt of the said service, is immaterial. The so called MLAs are none other than the banking and financial institutions and 10 of them put together has extended 90% of the loan and the remaining six banks have extended only remaining 10% of the loan. Thus, keeping in view the trade practices as also the holistic view of the operations, in my view, no distinction can be made for the services in connection with the loan vis-ŕ-vis borrowing. Services provided by the MLAs were not in relation to 'borrowing' and in relation to 'lending'. Classification of service - Keeping in view the said trade practices, the definition of the stock broker service clarifies that it is chargeable for both sale or purchase. Services in relation to the lending are different and cannot be compared with the stock broker's services. The contention of the learned counsel does not hold good. The contention of the appellant also rejected that, the Agent Bank provided services to the lender banks not to the appellant. Needless to say that the appellant paid fees to the Agent bank in terms of the Facility Agreement dated 10/10/2006. It is inconceivable that the appellant would pay fees to the Agent bank without any service to it. The Agent bank acted mainly as a coordinator between the appellant and the lender banks for various follow-up action in connection with the loans and repayments thereof. Taxability of services provided outside India - the fact that the amount was used for acquiring assets abroad or in India will not make any difference. Extended period of limitation - it is not possible to accept the contention that the appellant had a bonafide doubt. - the information should be provided to the concerned jurisdictional assessing authority. The balance sheet may be providing some details but these generally do not provide the precise details to enable the department to issue demand notice. In any case the balance sheet may be a public document but the question is whether the balance sheet or information was given to the assessing authorities. In the present case, the appellants did not provide the information in July, 2007. They did not pay the tax as per the direction of the letter dated 27/08/2007. Under the circumstances, I am of the view that the relevant information was suppressed from the department and extended period of limitation has been correctly invoked. - Penalties upon assessee are also upheld - Decided against assessee.
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