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2016 (3) TMI 852 - CESTAT BANGALORE

2016 (3) TMI 852 - CESTAT BANGALORE - TMI - Imposition of penalties under Section 78 & 77(1a) and 77(2) of the Finance Act, 1994 - Taxable services of 'Erection, Commissioning or Installation' service received from outside India - No intention of assessee for non-payment of service tax as when pointed out that there was liability on them to pay service tax for the above services, they immediately made the payment along with interest - Held that :- the provisions of Section 73(3) of the Finance A .....

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of this Chapter or of the rules made thereunder with intent to evade payment of service tax, an assessee cannot take the benefit of provisions of Section 73(3) of Finance Act 1994. But the Department has completely failed to prove the same. Also it was entitled to take CENVAT credit for payment of service tax, therefore, the intention to evade payment of service tax do not arise and the penalties imposed are set aside. - Decided in favour of assessee - ST/25500/2013-DB - Dated:- 10-2-2016 - SHRI .....

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f Erection, Commissioning or Installation service from M/s. IMG (Asia) Machinery Co. Ltd. China this service was received and the appellant paid consideration of US dollar 6500 towards the said service to above Chinese Company. The amount of US dollar 6500 was worked out to ₹ 2,56,750/- (Rupees Two Lakhs Fifty Six Thousand Seven Hundred and Fifty only) at the rate of 1 USD=Rs. 39.5 as per the Foreign Bills Transaction Advice of M/s. Vijay Bank, Mysore dated 07.12.2007 and the demand of s .....

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bove demand of ₹ 30,810/- (Rupees Thirty Thousand Eight Hundred and Ten only) including the Education Cess and Secondary Higher Education Cess was confirmed along with interest. The appellant-assesse had paid the above service tax totaling to ₹ 30,810/- (Rupees Thirty Thousand Eight Hundred and Ten only) and the interest of ₹ 9652/- (Rupees Nine Thousand Six Hundred and Fifty Two only) which was appropriated by the order-in-original passed by the Assistant Commissioner. Assista .....

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now is before this Tribunal against the order-in-appeal dated 14.11.2012 by Commissioner (Appeals). The appellant mainly argues as follows: i. They were under bona fide belief that since they had paid Customs duty on entire contracted price including the amount of US dollar 6500 towards Erection, Training and Roundup Trip ticket cost, they were not required to pay service tax separately on the said amount towards erection and commissioning. ii. The appellant paid service tax of ₹ 31800/ .....

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ive and when the amount of US dollar 6500 paid towards Erection, Training and Round Trip Ticket Cost was included in the price or transaction value of the imported goods and the customs duty was paid, the same amount was not to be treated as the value for levy of service tax. Appellant relies on BSNL Vs. Union of Indi [2006 (2) S.T.R. 161 (SC)]. iv. The allegations of suppression of facts or contravention of the Finance Act, 1994 with intention to evade payment of service tax and invoking larg .....

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Section 73(3) of the Finance Act 1994. When service tax paid by the assessee is available as cenvat credit resulting in Revenue Neutral position, there cannot be any intention to evade payment of service tax. Appellants believed bonafide as per the facts they had paid customs duty on total value including the amount of US dollar 6500 which was the value towards Erection, Training and Roundup Trip ticket cost , there was reasonable cause for not paying service tax on this amount paid towards Ere .....

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isions of Section 80 of Finance Act applies to the facts of the case and no penalty is imposable. 3.1. The appellant represented by learned advocate, Shri M.S. Nagaraja has cited in support the following case-laws: a) CCE Vs. Tejas Agency 2014 (34) STR 803 (Guj.) b) CCE & ST, LTU Bangalore Vs. Adecco Flexione Workforce Solutions Ltd. 2012 (26) STR 3 (Kar.) c) CST, Bangalore Vs. Master Kleen 2012 (25) STR 439 (Kar.) d) CCE, Nagpur Vs Murli Industries Ltd. 2015 (39) STR 1033 (Tri.-Mumbai) e) S .....

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on on the part of appellant-assessee for non-payment of service tax. The facts clearly indicate that when it was pointed out to the appellant that there was liability on them to pay service tax for the services of Erection, Commissioning and Installation, they immediately made the payment along with interest vide challans dated 19.03.2010 and 31.08.2010. They had also made a request that as there was confusion and doubt and as they had paid the liability of service tax along with interest show .....

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