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2020 (3) TMI 84 - AT - Service TaxReverse charge mechanism (RCM) - import of services - revenue neutrality - Principle of construction of the statue - principle of “ejusdem genersis” and “noscitur a sociis” - Classification of services - service of providing the C-Band Transponder - outsourced activities or not - Appellants have argued that the services provided to them by M/s AsiaSat are specialized services without which the Broadcasting would be impossible. These services cannot be called as outsourced service or infrastructural support service, for classification of these service under the category of Business Support Services - demand along with interest and penalty - extended period of limitation. HELD THAT:- The arguments of appellant cannot be agreed upon - The principle of “ejusdem genersis” and “noscitur a sociis” are essentially principle of construction of the statue, provide that the words used in a statue should be interpreted along with the words in company which they occur i.e. the word occurring together derive the colour from each other. This essentially mean that the word which are more general in nature get restricted by the other words used therein. However the said principles are not applicable when the words used in the statute are simple plain and clear. In the SIDDESHWARI COTTON MILLS (P) LTD. VERSUS UNION OF INDIA AND ANR. [1989 (1) TMI 126 - SUPREME COURT], Hon’ble Supreme Court has applied the principle of “Ejusdem Generesis” for interpreting the phrase like “or any other process” - It is not the case herein wherein separate identifiable words have been used in the definition clause. Hence following the decision of Hospital Mazdoor Sabha, supra we hold that the said principles of “Noscitur a Sociis” and “Ejusdem Genersis” to be not applicable in the present case. Relying on the explanation to Section 65(104c) and the decision of the tribunal in the case of M/S. AIR LIQUIDE NORTH INDIA PVT. LTD. VERSUS C.C.E. JAIPUR [2017 (6) TMI 476 - CESTAT NEW DELHI] and DISH T.V. INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA [2015 (9) TMI 785 - CESTAT NEW DELHI] appellants have argued that for the service to be considered as “infrastructural support service”, office should have been provided along with various other facilities - In our view the said decision do not lay down that office should be provided as must for the service to be classified under the category of “infrastructure support service”. Nor do the explanation to Section 65(104c) state so. In the case of South Gujarat Roofing Tiles Manufactures, relied upon by the bench while passing the said decision, Hon’ble Supreme Court was interpreting the entry 22 of Minimum Wages Act, 1948 and held that the items included in it were plainly comprised in the expression ‘potteries industry’ which showed that the word ‘includes’ was not to extend the normal meaning of this expression. The conclusion was that the word includes was used in the explanation in the sense of ‘means’ and the definition provided by the explanation was exhaustive. From the explanation, it is evident that “infrastructure support service” has been defined using the phrase “includes” and not the word, “means”. The services rendered by M/s AsiaSat to appellant are nothing but “infrastructure support services” for supporting the business of broadcasting services undertaken by the appellants. Thus these services are appropriately classifiable as “Business Support Services” by the Section 65(104c) of the Finance Act, 1994 and taxable as per Section 65 (105)(zzzq) ibid - Since the service provider i.e. M/s AsiaSat do not have any fixed business establishment in India, appellants as recipient of service are required to discharge the service tax liability as per Section 66A of the Finance Act, 1994 read with Rule 3(iii) of the Taxation of Services (Provided from outside India and received in India) Rules, 2006. Extended period of limitation - only argument advanced by the appellant against the invocation of extended period of limitation for making the demand is that the issue is completely revenue neutral as any service tax paid by them on the basis of reverse charge as recipient of service would be available to them in the form of CENVAT Credit - HELD THAT:- We are not in position to agree with the said submissions made by the appellants. Unlike the erstwhile proviso to section 11A(1) Central Excise Act, 1944 where the intention to evade payment of duty was material factor in cases where suppression etc; was invoked, the construction of Section 73(1) of Finance Act, 1994 is different. We are in complete agreement with the findings recorded by the Commissioner. If the argument of revenue neutrality was to be considered a valid argument under the scheme of Finance Act, 1994, then entire provisions relating to payment of service tax on reverse charge will become otiose and every service recipient will claim that what so ever service tax he pays on reverse charge basis will be available to him as CENVAT Credit. Argument of revenue neutrality thus would not be available in case where the service tax is demanded by the recipient of service on the reverse charge basis - the demand made in this Show Cause Notice by invoking the extended period of limitation as per proviso to Section 73(1) of Finance Act, 1994 is upheld. Demand of interest made from them in terms of Section 75 of Finance Act, 1994 - HELD THAT:- The demand is not justified - reliance can be placed in the case of COMMR. OF SERVICE TAX, AHMEDABAD VERSUS PEPSI COLA INDIA MARKETING CO. [2007 (8) TMI 51 - CESTAT, AHMEDABAD]. Interest under Section 11AB and penalty under Section 11AC of the Central Excise Act, 1944 - HELD THAT:- Since the invocation of extended period of limitation in respect of the show cause notice dated 08.04.2013 is upheld, the penalties imposed under Section 78 cannot be faulted with in view of the above referred decision of the Hon’ble Bombay High Court and the decision of Hon’ble Supreme Court in case of UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. [2009 (5) TMI 15 - SUPREME COURT]. Penalty under Section 77 for various infractions noticed in complying with provision of law - HELD THAT:- Penalty under Section 77 are civil in nature and are imposed for infractions noticed - Since there is no dispute about such infractions as recorded by the Commissioner in his impugned order, penalties as imposed under Section 77(2) are justified. Penalty u/s 76 of FA - HELD THAT:- Any person liable to Service Tax fails to pay the same is required to pay the same is required to pay penalty under Section 76 at the rate specified therein from time to time, in addition to Service Tax and the interest thereon - as in the present case, the is non-payment of service tax, penalty u/s 76 is upheld. Appeal allowed in part.
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