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2015 (9) TMI 160 - CESTAT MUMBAI

2015 (9) TMI 160 - CESTAT MUMBAI - 2015 (40) S.T.R. 752 (Tri. - Mumbai) - Import of taxable services - reverse charge - entire exercise is revenue neutral - Banking and other Financial Services - Invocation of extended period of limitation - Levy of Penalties under Sections 76, 77 and 78 - Mens rea - Held that:- Service tax was paid by the appellant after the issue of the show cause notice and before the passing of the adjudication order. Revenue relies on the decision of the Apex court in the c .....

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ise is revenue neutral we find that mens rea is not established for imposition of penalties. - As the duty stands paid and credit of duty paid is admissible, the impugned order is set aside to the extent of recovery of interest and imposition of penalties. - Decided in favour of assessee. - Appeal No. ST/341/10-Mum - Final Order No. A/1334/2015-WZB/STB - Dated:- 26-5-2015 - M V Ravindran, Member (J) P S Pruthi, Member (T),JJ. For the Appellant : Shri D H Nadkarni, Adv. For the Respondent : Shri .....

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rs in relation to Economic Commercial Borrowings (ECB). The fees paid by the appellant in foreign exchange to the lenders abroad as management fees, facility agent fees and appraisal fees was held to be liable to service tax under the category of 'Banking and other Financial Services' defined under section 65 (12) (a) (ix) read with section 65(105)(zm) in terms of sections 66A and 68 (2) on reverse charge basis as recipient of the taxable service. The demand was confirmed for the period .....

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e is revenue neutral because service tax paid becomes available immediately to them as Cenvat credit. Therefore demand is not sustainable for extended time period and penalty is not imposable in the absence of intention to evade payment of service tax. He relied on the Tribunal judgements in the case of Jay Yushin Ltd 2000 (119) ELT 718 (T-LB) and the case of British Airways 2014 (36) STR 598 (T). The alternate submission is that service tax, in any case, is exempted on transactions undertaken w .....

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ted by the officers of the Department and the tax was paid only thereafter. The belief of the appellant is malafide rather than bonafide. According to him penalty is imposable in terms of the Hon'ble Supreme Court decision in the case of Commissioner versus KitPly Industries Ltd. 2011 (267) ELT 289 (SC). 6. We have carefully gone through the facts of the case and considered the submissions of both sides. It is undisputed that the service tax was paid by the appellant after the issue of the s .....

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he facts of each case and not merely by showing the availability of an alternate scheme; (b) Where the Scheme opted for by the assessee is found to have been misused(in contradistinction to mere deviation or failure to observe all the conditions) the existence of an alternate scheme would not be an acceptable defence: (c ) With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the Revenue neutral situation comes about in relation to the credit av .....

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