2009 (6) TMI 408 - AT - Service Tax

The service tax demand of Rs. 11, 31, 61, 912/- and imposition of penalty of Rs. 11 crores has been made on the ground that the appellants failed to discharge their liability towards service tax on the services received by them from foreign service provider during the period from 12-3-03 to 31-3-07. - appellant submitted that according to the decision of the Hon ble Mumbai High Court in case of Indian National Ship Owners Association 2009 - TMI - 32013 - HIGH COURT OF BOMBAY in respect of services received from foreign service provider prior to 18- 4-06 no tax is payable by the service receiver. Revenue submits that the services received by the appellants were actually rendered within the country since it has been found from the records that all off-shore wells for oil exploration were located within 12 nautical miles from the shore and therefore formed a part of Indian land-mark. Appellant is a Public Sector Undertaking above Bombay HC ruling is relevant 6 crore already deposited by the appellant towards Service tax as sufficient for the purposes of pre-deposit under Section 86 of Finance Act 1994 and waive the requirement of deposit of balance amount of service tax and penalties imposed upon the appellants

Summary

The judgment from the Appellate Tribunal, CESTAT, Ahmedabad, involves a service tax demand of Rs. 11,31,61,912/- with interest and penalties imposed on the appellant for failing to discharge service tax liabilities on services received from a foreign service provider between 12-3-03 and 31-3-07. The appellant, represented by Shri S. Thirumalai, argued that based on the Mumbai High Court's decision in Indian National Ship Owners' Association [2009 (13) S.T.R. 235 (Bom.)], no tax is payable for services received from a foreign provider before 18-4-06. The appellant claimed that their net liability is less than Rs. 6 crores and that they have already paid Rs. 6,10,07,430/- under protest, requesting this be considered sufficient for pre-deposit.The respondent, represented by Shri S.K. Mall, SDR, contended that the services were rendered within Indian territory, but acknowledged that the dispute is over the date of liability. The Tribunal, considering the submissions and the Mumbai High Court's decision, found the amount already deposited by the appellant sufficient for pre-deposit under Section 86 of the Finance Act, 1994. Consequently, the Tribunal waived the requirement for further deposit of the balance service tax and penalties, staying the recovery during the appeal's pendency.