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2020 (7) TMI 320 - AT - Service TaxExtended period of limitation - demand of service tax - banking and other financial services or not - appellant availed services for placing Foreign Currency Convertible Bonds (FCCB) in the International Capital Market to raise capital - reverse charge mechansim - Section 66A of the Finance Act, 1994 - HELD THAT:- It is not in dispute that the appellant availed the services from foreign service providers in relation to floating of FCCBs in those countries The nature of services referred by the service providers falls squarely within the definition of merchant banker in terms of the SEBI (MBR 1990).Therefore, in terms of Section 65(12)(a)(iii) the services referred squarely fall under the definition of bank and other financial services. As the recipient of these services, the appellant was required to pay service tax under reverse charge mechanism in terms of Section 66A of the Finance Act, 1994 r/w Rule 2 of Service Tax Rules, 1994 - It is not in dispute that the appellant has not paid the service tax and had not disclosed these facts to the Revenue at any stage. Investigation by the officers revealed these facts and on being pointed out the appellant paid the entire amount of service tax along with some interest - decided in favor of Revenue. Time Limitation - Penalty - HELD THAT:- There are no evidence in the particular facts and circumstances of this case that the appellant tried to actively suppress or misstate facts. It is true that they have not paid service tax which they were required to. It is equally true had they paid the service tax they could have immediately taken the CENVAT credit of the entire amount so paid and utilized it. By delaying the payment, the appellant would only be liable to pay interest which also cannot be claimed as CENVAT credit. Thus, by not paying Service Tax, the appellant would have lost something but gained nothing - there is no ground to invoke extended period of limitation. As the entire period of demand is beyond the normal period the same needs to be set aside along with the interest - penalty u/s 78 also set aside. Appeal allowed - decided in favor of appellant.
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