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2018 (11) TMI 1292 - AT - Service TaxPenalty u/s 76, 77 and 78 of FA - Non-payment of Service tax - import of services - reverse charge mechanism - It was alleged that the appellants were receiving “Intellectual Property Services” and “Management Consultancy Services” from their principals in UK and have not paid service tax on the same - Held that:- In the instant case, the appellants have paid penalty of 25% before the issuance of show-cause notice. They had a reasonable belief for the reason that the liability of the service recipient to pay service tax under the reverse charge mechanism was in doubt for everyone in the field during the relevant period. It was only after the Supreme Court’s decision in the Indian National Shipowners case [2009 (12) TMI 850 - SUPREME COURT OF INDIA], the issue had attained finality. There were reasons to entertain a reasonable belief. The appellants have also paid the penalty of 25% before the issue of show-cause notice - penalty not imposable - appeal allowed - decided in favor of appellant.
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