Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2024 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (1) TMI 453 - CESTAT KOLKATAInvocation of Extended period of Limitation - Export of services - non-receipt of convertible foreign exchange - non-payment of service tax - Maintenance and Repair Services - Installation and Commissioning services - appellants were not discharging Service Tax for the services rendered to their Nepal clients - interest - penalties - HELD THAT:- The service in question was being provided by the service provider located in India, to Indian clients wherein part of the service was rendered to these clients in foreign locations. The service in question was that of ‘tour operator in relation to a tour’. Section 65B (52) and 66B considered by the High Court came into effect from 1.7.2012. It is also observed that the Petitioners, as a matter of fact canvassed the lenient clauses of Export of Services Rules 2005, by which they were better off under those Rules rather than the modified provisions of Rule 6A of Service Tax Rules. This point also has been considered, while the High Court rendered the judgement. Therefore, in the present case where the period is question in April 2004 to March 2009 and Rule 6A has no application, the decision of this case law is not relevant to the facts of the present case. In the present case, the service provided by the appellant falling under Section 65 (105) (zzg), is specifically mentioned at Export of Services Rules, 2005, Rule 3 (1) (ii). Under this Rule, even if the service is partly provided abroad, the same is to be treated as export of service. In the present case, admittedly, the ‘repairs and maintenance service’ has been carried out for their Nepal based clients at Nepal only. Therefore, this condition is getting fulfilled. The condition of receiving the proceeds in convertible foreign exchange is a mandatory condition and not a procedural one. During the period under discussion, the Tribunals and High Courts were consistently holding that while mandatory condition is required to be fulfilled without any deviation, the procedural lapses, if any, can be condoned - in the present case, the appellant has not fulfilled the Condition of receiving the proceeds in ‘Convertible Foreign Exchange’, as has rightly been held by the Adjudicating Authority with proper reasoning at Page 6 of the Order in Original and as upheld by the Commissioner (Appeals). Therefore, the Appeal fails on merits. Accordingly, we uphold the impugned Order on merits. If the Service Tax is not separately collected, the benefit under Section 67(2) should be granted? - HELD THAT:- The appellant has carried a firm belief that Service Tax is not payable in terms of Section 64(1) and did not pay the same. They also treated the transactions as exports in their ST 3 Return showing the full Invoice value as turnover and did not pay the Service Tax, on a clear belief that no Service Tax is payable. The Invoice has been raised for the full consideration. Therefore, in view of these factual details, it cannot be held that the appellant had any intention to treat the consideration received as cum-tax amount. They have realized the amount purely for the services rendered only. Hence, the provisions of Section 67(2) cannot be applied in this case. Therefore, this benefit for quantification of demand cannot be extended. Time Limitation - HELD THAT:- From the Invoices, it is seen that they have not charged any Service Tax on the Nepal service recipients. The appellants have, in fact fulfilled the first condition of Export of Services Rules, 2005 by rendering the same fully at Nepal. Therefore, they can be said to have entertained bonafide belief that no Service Tax is payable. All the documentary evidence shows that they have declared all the transactions in their books of accounts, ST 3 Returns and Income Tax Returns. Hence, far from the allegation of suppression with an intent to evade, the appellants have come clean with their proper filing of ST 3 Returns and other statutory Returns - the confirmed demand for the extended period is legally not sustainable - the confirmed demand for the extended period set aside. Interest - HELD THAT:- Since it is held that the confirmed demand for the extended period is not legal and payable, the appellants are required to discharge the Service Tax which is payable, if any, for the normal period, along with interest in terms of Section 75. Penalties - HELD THAT:- As the issue is that of bonafide belief and interpretational difficulties, all the penalties, including in respect of the balance amount to be quantified for the normal period is set aside. Appeal allowed in part.
|