TMI Blog2015 (7) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... any service tax liability. On perusal of the records, we find that factually appellants had filed writ petition on 8.9.2006 and it was admitted by the Hon'ble High Court and departments Affidavit was filed on 29.9.2006, which admitted the contentions that the appellants were engaged in importing of rough diamonds and have paid commission to the brokers through whom they procured diamonds from DTC. If the department was aware of writ petition filed by the appellants and have filed an affidavit in September 2006, nothing prevented them from issuing protective demand notices in order to safeguard the Revenue. Appellants could have entertained a bona fide belief that the constitutional validity having been challenged by them in writ petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Vishinda Diamonds ST/89907/2014-MUM 19.9.2011 18.4.2010 To September 2010 4 Rosy Blue (I) Pvt. Ltd. ST/88970/2014-MUM 17.10.2011 20.9.2012 18.4.2006 To 31.3.2012 5 KGK Diamonds (I) Pvt. Ltd. ST/89973/2014-MUM 26.8.2011, 20.3.2012 22.10.2012 18.6.2006 To 31.3.2012 6 K.P. Sanghvi Sons ST/90161/2014-MUM 28.3.2011 13.10.2011 June 2006 To March 2011 The above app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee with the contention raised by the appellants and after following the due process of law confirmed the demands raised along with interest and imposed penalties. 4. Ld. Counsel appearing on behalf of all the appellants would take us through the records of the case. After taking us through the show cause notices and the impugned orders, he would submit that the demands which have been confirmed by invoking the extended period are liable to be set aside as the appellant herein had filed a Writ Petition No. 2482 of 2006 on 8 th September, 2006 before the Hon'ble High Court of Bombay challenging the constitutional validity of levy of service tax on services rendered and received from outside India. It is his submission that the said wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demands needs to be set aside. 5. Ld. Special Counsel appointed by the Revenue would take us through the records again and submit that the appellants were directed to produce various records for ascertaining the correct tax liability. He would submit that none of the appellants responded positively to the summons issued and were always claiming that writ petition filed by them challenging the constitutional validity is still pending. It is his submission that after the date of payment of commission to the foreign entity was provided, the Revenue issued the show cause notices hence there was delay from the appellants end for which there cannot be a claim of limitation. He would submit that on merits, the issue is now settled by the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax liability would arise under the reverse charge mechanism w.e.f 18.4.2006. Accordingly, in view of the law being settled we hold that on merits, the appellants appeal do not succeed. 9. At the same time, we find that all the appellants have been taking a consistent plea before the adjudicating authority that they were under a bona fide belief that the writ petition which has been filed by them has been filed by them has been admitted and is still pending, hence they need not discharge any service tax liability. On perusal of the records, we find that factually appellants had filed writ petition on 8.9.2006 and it was admitted by the Hon'ble High Court and departments Affidavit was filed on 29.9.2006, which admitted the contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing pending before the Hon'ble High Court, they need not pay any service tax on the amount that is remitted to the brokers. This can be bona fide belief of the appellants, accordingly, the demand which has been confirmed against all the appellants by invoking the extended period of limitation are liable to be set aside and we do so to that extent the appeals are allowed. At the same time, the demands which are within the period of limitation from the date of issuance to the show cause notice needs to be upheld with interest and we do so, to that extent appeals are rejected. 10. This takes us to the issue of penalties imposed on the appellants under various provisions of the Finance Act, 1994. We find that the appellant need not be vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
