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TMI Blog2015 (12) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Chennai, in Miscellaneous Order No.40855 of 2015, dated 29.5.2015, disposing of an application presented under Section 35B of the Central Excise Act, 1944, read with Section 86 of the Finance Act, 1994. 3) The brief facts of the case are as follows: 3.1) The appellant is engaged in the manufacture of Copper cathodes, copper wires etc. The price of the imported copper is determined on the basis of the price listed at London Metal Exchange. For manufacturing copper cathodes, the appellant requires substantial capital for sourcing the raw materials. Therefore, the appellant had raised working capital, as well as capital required for undertaking further expansion through various modes, including by way of issue of American Depository Shares. 3.2) When a Non-U.S company wants to tap the U.S market, such companies issue American Depository Shares, which are deposited with the depository and they are purchased by various entities. Such issues are also underwritten by various underwriters. Against each American Depository Shares, the depository issues receipts called American Depository Receipts, which are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing agreement with various organisations, for the sale and purchase of American Depository Shares, by the underwriters. As per the prospectus, the underwriters are entitled for discounts and commissions. It had been found that the assessee had availed the services of underwriters, for the purpose of underwriting the issue of American Depository Shares, which is liable for service tax, under the underwriter services. As such, the assessee was liable for payment of service tax, for underwriters services, in terms of Rule 2(1)(d)(iv) of the Service Tax Rules, 1994, read with Section 66A of the Act. Since disclosure had not been made by the assessee, to the Department, about the said service and as it had come to light only during the audit conducted by the department, it had been considered to be suppression of facts, with the intent of evading payment of service tax. Hence, the department had proposed to invoke the provisions of Section 73(1) of the Act. Further, for the non payment of service tax, the assesseee was said to be liable for the payment of interest, under Section 75 of the Act, and was also liable for imposition of penalties, under Sections 76, 77 and 78 of the Act. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service and non-payment of service tax." 3.9) Aggrieved by the order passed by the Commissioner of Central Excise, Tirunelveli, dated 24.1.2014, the assessee had filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal on 26.4.2014, in Miscellaneous Order No.40855 of 2015. A stay application had also been filed before the said Tribunal, dated 26.4.2014, to stay the order passed by the Commissioner of Central Excise. The Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, in the Application No.ST/S/41081/2014, in ST/40826/2014-DB, on 29.5.2015, had directed the assessee, the appellant herein, to deposit Rs. 7 crores, within eight weeks from the date of receipt of a copy of this order and to make compliance on 19.8.2015. Paragraph 10 of the said order reads follows: "10. Prima facie looking into various aspects of the case and without prejudice to the grounds of appeal of appellant as well as contentions of Revenue and also taking into consideration the limitation aspect, it appears that the service provided having relation to underwriting of shares of the Indian Company (appellant) provided in any manner brings that service to fold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services rendered by the overseas underwriter was per se not taxable under Section 65(105)(z) as the expression underwriter and underwriting have been defined under Section 65(116) and 65 (117) to have the same meaning as assigned under Rule 2 of the Securities and Exchange Board of India (Underwriters) Rules, 1993. iv) Whether the CESTAT while deciding a stay application could take a view contrary to that of a co-ordinate bench which has finally decided the very same issue as also a view different from that taken in other stay orders. v) When the Respondent Commissioner has in his letter to the Chief Commissioner clearly confirmed that no tax liability could be fastened on the Appellant and the dispute also being revenue neutral could the Appellant be still required to pre-deposit. vi) Whether the Appellant could be directed to pre-deposit an amount higher than 75% in view of judgments of the Punjab and Haryana and Rajasthan High Courts." 4. At this stage of the hearing of the Civil Miscellaneous Appeals, Mr.C.Natarajan, the learned Senior Counsel, appearing on behalf of the appellant had submitted that the Order-in-Original, passed by the Commissioner of Central Excise, Ti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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