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2019 (4) TMI 1084 - AT - Service TaxPenalty u/s 78 of FA - Non-payment of service tax - insurance auxiliary services received from abroad for vessels - reverse charge mechanism - period between 11.04.2008 and 31.03.2013 - bonafide belief or not - HELD THAT:- The Appellants are having specification vessels including accommodation, barges and tugs etc., which are primarily used by Oil and Gas Industries and are also providing water diving services. In the light of confusion within the industry and challenge on levy, the Appellants registered themselves on 21.11.2018, under ‘Supply of Tangible goods Services’ classifiable under Section 65 (105) (zzzzj) read with Section 65(50) of the Finance Act, 1994 and started paying service tax. Respondent Department entertained a view that for the period prior to registration from 15.06.2008 to 30.11.2008, the Appellants are required to pay service tax. This being so, demand of service tax under supply of tangible services for the period prior to such registration, though not disputed, can never be considered to be in conformity to Section 265 of the Constitution of India. Having regard to the fact that investigation by Anti-Evasion Wing had brought all those duty demand from the records maintained by the appellant and considering the fact that the issue is a bonafide dispute of legal interpretation of the newly introduced provision, no malafide can be attributed to the appellant so as to call for imposition of any penalty. Appeal allowed - decided in favor of appellant.
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