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2015 (7) TMI 429 - CESTAT MUMBAI

2015 (7) TMI 429 - CESTAT MUMBAI - 2015 (40) S.T.R. 759 (Tri. - Mumbai) - Liability to discharge service tax on amounts which have been remitted by the appellants to foreign entities for the commission on the import of rough diamonds - Bonafide belief - Invocation of extended period of limitation - Held that:- 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 b .....

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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 petition and the same being 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 be .....

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WZB/STB - Dated:- 29-5-2015 - M V Ravindran, Member (J) And P S Pruthi, Member (T),JJ. For the Appellant : Shri A Shirazi, Adv. For the Respondent : Shri V K Singh, Spl Counsel ORDER Per: M V Ravindran: This bunch of appeals are disposed of by a common order as the facts and in the issue is same. 2. The following appeals are disposed of: Sr. NO. Name of the appellant Appeal No. SCN dt. Period involved 1 Interjewel Pvt. Ltd. ST/88511/2014-MUM 20.9.2011 18.4.2006 To 14.5.2008 2 B. Vijay Kumar & .....

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have confirmed the demand of the service tax liability, interest thereof and imposed penalties on a finding that the appellants have not discharged the service tax liability on amounts remitted by them to the persons situated abroad on receiving services from them. All the appellants have been issued show cause notices invoking the provisions of Section 66A of the Finance Act, 1994 wherein provision was made for levy of service tax on the service recipient for the services rendered by a person s .....

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lants herein and M/s. DTC. The appellants pay commission to the broker in foreign exchange. The said foreign exchange is remitted through the banking channels. After completing the investigation in all these appeals, show cause notices of various dates as hereinabove indicated, were issued. The appellants contested the show cause notices before the adjudicating authority on merits as well as on limitation. The adjudicating authority did not agree with the contention raised by the appellants and .....

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re 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 writ petition has been admitted by the Hon'ble High Court on 29 th March, 2007 and it is still pending. He would also submit that in response to the said writ petition which was served upon the office of the Commissioner through the standing counsel, an affidavit was filed by the department on 29.11.200 .....

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on merits also does not arise. He would submit that since all the appellants were before the Hon'ble High Court in writ petition, they had entertained the bona fide belief that they are not liable to pay the service tax till the outcome of the writ petition filed by them. Hence, imposition of penalties on the appellants is un called for and needs to be set aside. It is his further submission that view of the appellants claim of Revenue Neutrality, as few of the appellants are discharging the .....

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e 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 judgment of the Hon'ble High Court of Bombay in the case of .....

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e clearly covered under the suppression of facts with intent to evade tax. Hence, the claim of bona fide belief does not arise. He would also rely upon the view taken by the Tribunal in the case of Commissioner of C. Ex, Chandigarh vs. Baba Asia Ltd. 2011 (267) ELT 115 (Tri-Del). 6. We have considered the submissions made at length by both sides and perused the records. 7. On perusal of the records, we find, as stated by both sides, the issue is of liability to discharge service tax on amounts w .....

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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 .....

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demand notices in order to safeguard the Revenue. As has been already reproduced hereinabove, we find that bulk of the show cause notices were issued by the Revenue department in 2011 invoking the periods as indicated against the details of individual appellants. In our view, the demand of the service tax liability by invoking the extended period in all these cases will not survive as Revenue was well aware of the activity of the appellant of remitting the payments to the broker as commission t .....

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