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2023 (9) TMI 235 - AT - Service TaxLevy of service tax - Payment of actual consideration including service charges in the form of Agency fees/Arrangement fees/Legal charges/Upfront charges/Commitment charges etc. in Foreign Currency, for availing External Commercial Borrowing (ECB) - legal charges - penalties - reverse charge mechanism. Payment of actual consideration including service charges in the form of Agency fees/Arrangement fees/Legal charges/Upfront charges/Commitment charges etc. in Foreign Currency, for availing External Commercial Borrowing (ECB) - HELD THAT:- It is a fact on record that prior to 18.04.2006 the service tax was not payable by the appellant for the loan obtained by them from foreign bankers, who are not having their registered office in India under Reverse Charge Mechanism as held by the Hon’ble Bombay High Court in the case of Indian National Shipowners Association [2008 (12) TMI 41 - BOMBAY HIGH COURT], therefore, the tax liability of Rs.19,09,550/- was not sustainable against the appellant. Accordingly, the same is set aside. Legal charges - HELD THAT:- The taxability on legal charges came into effect form 01.09.2009 and the said legal charges has been paid by the appellant prior to that. In that circumstances, no service tax is payable by the appellant for legal services received under Reverse Charge Mechanism. With regard to rest of the demand, the appellant has admitted their liable and paid immediately when it is pointed out to the appellant during the course of investigation. Penalties - HELD THAT:- As appellant has paid the disputed amount of service tax immediately on pointing out by the authorities, therefore, giving them the benefit of section 80 of the Finance Act, 1994, no penalty is imposable on the appellant. Therefore, penalties imposed on the appellant are also set aside. Appeal allowed.
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