Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 593 - CESTAT KOLKATAExtended period of limitation - Demand of Service Tax - banking and other financial services - upfront/arrangement fees paid to foreign financial institution/banks for providing finance in nature of external commercial borrowing (ECB) - roaming charges paid to foreign telecom operators (FTO) - various expenditures made in foreign currency - interest - penalty Banking and other financial services - penalty - HELD THAT:- The entire amount of disputed tax along with interest was deposited by the Appellant before issuance of SCN. From the impugned order, it is observed that out of the total demand of service tax of Rs. 95,22,267/-, the Appellant paid service tax of Rs. 82,67,455/- on 05.10.2010 and interest of Rs. 85,393/- was also paid on 20.01.2011 immediately on receipt of the letter dated 08.11.2010 from the department. In the impugned order, the Ld. Commissioner has rightly observed that there was no malafide intention on the part of the Appellant to evade payment of service tax and accordingly extended the benefit of Section 73(3) of the Finance Act, 1994 and not imposed any penalty. A perusal of the documents available on record indicate that there was no ground for imposition of penalty on this demand, as there was no intention to evade payment of tax. Thus, the Ld. Commissioner has rightly not imposed penalty. Accordingly, the appeal filed by the department on this count is dismissed. Regarding the demand of Rs. 12,54,812/-, it is observed that the payment on this account was made by the Appellant on 06.08.2009 - Since the payment of service tax along with interest was made before issue of the Notice, no malafide can be attributed to the Appellant and the benefit of Section 73(3) of the Finance Act, 1994 should have been extended to this demand also. Accordingly, the penalty under Section 78 of the finance Act, 1994 imposed on the appellant on this count is not sustainable. Demand of service tax confirmed under the head “Telecommunication services” on roaming charges paid to Foreign Telecommunication Operators (FTOs) - HELD THAT:- The payment of roaming charges was made by the Appellant to FTOs for providing connectivity services to their subscribers when they are abroad. During the relevant period only telecommunication services provided by a ‘Telegraph Authority’ to a person were taxable. In the instant case, FTOs located abroad providing the connectivity services would not fall within the ambit of 'Telegraphy Authority' as defined under Section 65(111) of the Finance Act, 1994 read with Section 3(6) of the India Telegraph Act, 1885 - the charges paid for the services rendered by the FTOs cannot be taxed under head “telecommunication services” on the Appellant. The issue is no longer res-integra as the issue has been settled by the decision of the CESTAT, New Delhi in case of one of the Appellant's group Companies, viz. VODAFONE ESSAR MOBILE VERSUS C.S.T., DELHI [2017 (9) TMI 359 - CESTAT NEW DELHI]. The Tribunal in the aforesaid ruling was considering whether roaming services provided by foreign telecom company can be taxable under the head “business auxiliary service” wherein the Tribunal has observed It was held that services to inbound roamers is delivered and consumed in India and hence, it is not an export of service. It was further clarified that international practice treats the telephone service provided to an inbound roamer by the visited network, for purpose of taxation, in the same manner as a telephone service provided to any home subscriber. The demand confirmed in the impugned order on this count is not sustainable. Since the demand is not sustainable consequently, demand of interest and penalty is also not sustainable. Interest - penalty - revenue neutrality - HELD THAT:- The Appellant have paid the demand amount at the time of investigation stage itself and availed Cenvat credit thereon, making the entire situation revenue neutral. Since the tax payable by them under reverse charge mechanism is available to them as CENVAT credit, it is observed that the whole exercise is revenue neutral - the entire situation is revenue neutral and under these circumstances no interest and penalty is payable. Extended period of limitation - HELD THAT:- There is no suppression of fact with an intention to evade payment of tax exists in this case. Accordingly, they contended that extended period not invocable in this case. The Appellant has paid the service tax along with interest wherever payable, before issue of the Notice. The department has not brought in any evidence on record to substantiate the allegation of suppression. In the absence of any such evidence, invocation of extended period to demand service tax is not sustainable. Accordingly, the demands confirmed in the impugned order are liable to be set aside on the ground of limitation also. Appeal disposed off.
|