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2015 (11) TMI 471 - CESTAT MUMBAI

2015 (11) TMI 471 - CESTAT MUMBAI - TMI - Demand of service tax - import of services - reverse charge - payment of arrangement fees, underwriting fees, agency fees and legal fees as also out of pocket expenses - Imposition of penalty - Held that:- Appellant has received the service from consortium of Mandated Lead Managers in respect of facility arrangements in relation to raising of external commercial borrowings - service tax liability on an amount paid to the lead managers i.e. service provid .....

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nt is having a good case on the revenue neutrality, inasmuch any service tax paid by them under reverse charge mechanism is eligible as Cenvat credit as the external commercial borrowings are for the purpose of business activity of the appellant. Keeping this in mind, we find that the appellant had made out a case for non-imposition of penalty; invoking the provisions of Section 80 of the Finance Act, 1994, we set aside the penalties imposed on the service tax liability.

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- APPEAL No.ST/75/11 - Dated:- 9-7-2015 - Mr. M.V. Ravindran, Member (Judicial) And Mr. Raju, Member (Technical) For the Petitioner : Shri.J.C. Patel, Advocate For the Respondent : Shri.R.K.Das, Dy. Comm. (AR) ORDER Per: M.V. Ravindran 1. This appeal is directed against Order-in-Appeal No.P-I/RKS/207/2010 dated 28/10/2010 passed by Commissioner of Central Excise (Appeals), Pune-I. 2. Heard both sides and perused the records. 3. The issue involved in this appeal is regarding the service tax liab .....

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uthorities confirmed demands and interest and imposed penalties. 4. Learned Counsel would submit that they are not in challenge against the service tax liability payable under reverse charge mechanism for the amount remitted by them in respect of arrangement fees, underwriting fees and agency fees. It is his submission that in fact they have already discharged their service tax liability and interest thereof and they are only contesting imposition of penalties on these amounts of service tax con .....

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2013 (29) STR 9 (D). 5. Learned DR on the other hand would submit that there is no evidence to show that the legal fees and out of pocket expenses were actual reimbursement, in the absence of any evidence, value needs to be added to the gross value for discharge of service tax liability is the findings of the lower authorities. It is his submission that penalty has been correctly imposed and the claim of the appellant that it is a revenue neutral situation cannot be accepted as there is violatio .....

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s per the agreement. 6.2 As was submitted before us the service tax liability on an amount paid to the lead managers i.e. service providers, who have raised the external commercial borrowings in form of external commercial borrowings as to fee of arrangement and underwriting fee plus agency fee is undisputedly taxable under the category of banking and other financial service and taxable as per the provisions of Section 66A of the Finance Act, 1994, in hands of the appellant. To that extent, we .....

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