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2019 (1) TMI 1242 - AT - Service TaxReverse Charge Mechanism - consultancy services received from abroad - payment made by appellant to the consultants situated abroad during the period 1.7.2003 to 31.03.2008 - Held that:- Prior to 18.04.2006, the law is now clearly settled, that no service tax liability arises on the assessee under reverse charge mechanism for the payments made to foreign entities who render services to assessee - service tax liability, interest thereof and penalties imposed for the payments made to foreign consultants prior to 18.04.2006 is not sustainable and liable to be set aside. Service tax liability post 18.04.2006 - Held that:- The provisions of Section 66A of the Finance Act, 1994 are very clear and unambiguous in the case in hand, post 18.04.2006 the service tax liability needs to be discharged by the appellant as per the provisions of law - appellant had discharged the tax liability and on our direction, has also discharged the interest on 14.01.201 - the tax confirmation along with interest upheld. Penalty - Held that:- Appellant being a Government undertaking, would have been under the bonafide impression that tax liability may not arise. It is also to be noted that during the period in question, the law was in a flux situation, inasmuch as various litigations were pending before various Courts and the matter was settled by Hon’ble High Court of Bombay and Apex Court in 2009 - appellant has made out a case for setting aside of the penalties - penalty set aside by invoking section 80. Appeal allowed in part.
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