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2016 (3) TMI 140 - AT - Service TaxDemand of Service tax - Inadmissible Cenvat credit taken - Appellant took Cenvat credit on electricity and water charges during the period 2004-05 and paid service tax along with interest - Held that: the demanded amount relating to Cenvat credit taken on electricity and water charges alongwith interest was paid on 04.05.2007/ 07.08.2007 i.e. before the issuance of the show cause notice. It is seen from the show cause notice and from the impugned order that these both record the fact of payment of said amount alongwith interest and the allegation of suppression of facts has been invoked only in respect of other two components of the impugned demand and therefore in terms of sub-section 3 of Section 73, this amount need not have been made part of the show cause notice; in other words, no show cause notice was required to be served to the appellant in respect of this amount. Therefore penalty cannot be imposed in respect of this component of demand. Demand of Service tax - Brokerage/ commission paid to commission agent - Appellant pleaded that it paid commission to various agents, foreign as well as Indian, against services received from them for finalising deals with reinsurers but Such agents would not come in the category of insurance agents defined in Section 65(54) of the Finance Act, 1994 - Held that: the agents in question were not soliciting or procuring insurance business including business relating to the continuance, renewal or retrieval of policies of insurance rather they were engaged to help out is finalising deals with reinsurers. This component of demand has been confirmed under reverse charge mechanism in terms of Rule 2(1)(d)(iii) of Service Tax Rules, 1994 where the liability of the appellant would arise only in relation to service rendered to it by insurance agent. As the commission was paid by the appellant to persons who did not qualify to be called insurance agents the reverse charge mechanism was not applicable and therefore, the appellant being service recipient was not liable to pay service tax. In addition the liability to service tax in respect of commission paid to persons based abroad would not fall on the appellant also because reverse charge mechanism in such cases became applicable from 18.04.2006 referred to Supreme Court Judgment in the case of Indian National Shipowners Associations 2009 (12) TMI 850 - SUPREME COURT OF INDIA while period involved here is prior thereto. Therefore demand is unsustainable. Demand of Service tax - Difference while reconciling the figures coming from its regional office for the period 2002-03 - Appellant contended that there was no wilful mis-statement or suppression of fact as he only after reconciling the figures noticed the discrepency and informed the revenue about the same. Further he pleaded that the short payment can be adjusted out of the excess amount of ₹ 1.25 crores of service tax made during the period 2004-05 - Held that: the payment of excess amount in 2004-05 shows the bonafies of the appellant and there is no evidence which supports the allegation of wilful mis-statement or suppression of facts on the part of the appellant with regard to the short payment of the said amount of duty.Therefore, the extended period of five years is not invocable making atleast this component of demand time barred by stating the case of BSNL vs. CCE, Ahmedabad 2008 (12) TMI 87 - CESTAT, AHMEDABAD, where it has held that malafide intention to evade tax is not attributable to public sector undertaking owned by Government of India. - Decided in favour of appellant
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