TMI Blog2015 (12) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... d and discharged their liability in full, which is not in dispute. Having regard to the facts and circumstances of this case, which show that the appellants were eligible for cenvat credit on the service tax paid on the reverse charge mechanism, we find that there is bonafide reason for invoking sec. 80. Further, we also find that this is a case where the appellants have been able to show reasonable cause for delayed payment under bonafide belief as to taxability of service and in view of the revenue neutral situation, we find that the penalties imposed on the appellants cannot be sustained and has to be set aside. In the result, the amount paid towards service tax and interest thereon and appropriated is sustained and penalties imposed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at No.9, Raffles place, #50-01, Republic Plaza, Singapore, 048619. The arranger fee was paid to ICICI Bank Ltd., Singapore Branch for their services as a lead arranger of ECB. Since the ICICI Bank Ltd., Bangalore had paid service tax of ₹ 16,90,589/- on the processing fees paid to them, the appellants were under the bonafide belief that the liability of service tax if any on the arranger fee was also payable by the said Bank. Subsequently, it came to the notice of the appellant company that the recipient of the services is liable to pay service tax in terms of Section 66 A of the Finance Act, 1994, read with Taxation of Services (provided from outside India and received in India) Rules 2006. They have paid the entire service tax amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the appellants were under the bonafide belief that service tax fee any on the arranger fee was payable by ICICI Bank Ltd. and therefore they have not willfully suppressed the fact with intention to evade payment of service tax. Further, the Ld. Counsel also submitted that when the service tax paid on the borrowings and other financial services received by the appellants, is available as cenvat credit cannot be construed as intention to evade payment of service tax and this results in a situation of Revenue neutrality. He relied on the following case laws in support of his arguments:- 1. Nirlon Ltd. Vs. CCE, Mumbai 2015 (320) ELT 22 (S.C.) 2. CCE, Chennai-IV Vs. Tenneco RC India Pvt. Ltd. 2015 (323) ELT 299 (Mad.) He further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax. They have filed challan for proof of payment of interest. The appellant assessee on being informed about their liability to pay service tax have readily accepted and discharged their liability in full, which is not in dispute. Having regard to the facts and circumstances of this case, which show that the appellants were eligible for cenvat credit on the service tax paid on the reverse charge mechanism, we find that there is bonafide reason for invoking sec. 80. Further, we also find that this is a case where the appellants have been able to show reasonable cause for delayed payment under bonafide belief as to taxability of service and in view of the revenue neutral situation, we find that the penalties imposed on the appellants ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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