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2015 (12) TMI 1572 - CESTAT MUMBAI

2015 (12) TMI 1572 - CESTAT MUMBAI - TMI - Demand of interest and imposition pf penalties - for the period post 18.04.2006 - raised an amount as External Commercial Borrowing (ECB) in the form of Convertible Bond - to raise ECB, appellant had paid amounts to various entities situated abroad as an amount towards the service rendered - appellant discharged service tax liability and has also availed the CENVAT credit of such service tax liability on the amount paid as tax under reverse charge mecha .....

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n, he may have succeeded and no demand of tax would be sustainable on him by applying the judgement of Tribunal in the case of Jain Irrigation Systems Ltd [2015 (9) TMI 160 - CESTAT MUMBAI]. Therefore, we set aside the demand of the interest and the penalties imposed on the appellant by the impugned order which is challenged before us. - Appeal disposed of - ST/318/12 - A/85281/16/STB, M/85282/16/STB - Dated:- 30-12-2015 - M.V. Ravindran, Member (Judicial) and Mr. C.J. Mathew, Member (Technical) .....

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l Commercial Borrowing (ECB) in the form of Convertible Bond during the period from October 2004 to September 2006. In order to raise such ECB, appellant had paid amounts to various entities situated abroad as an amount towards the service rendered. According to Revenue, the amount paid by the appellant to this entities situated abroad is liable to service tax under the reverse charge mechanism. Appellant discharged the service tax liability and contested the show-cause notice. The adjudicating .....

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nd confirmed the interest on this amount and imposed equivalent penalty under Section 78 and penalty of ₹ 5,000/- under Section 77 of the Finance Act, 1994. Appellant is aggrieved by the demand of interest and imposition of penalties. Revenue has not preferred any appeal against the impugned order. 5. Learned Counsel would bring to our notice that an identical facts were in the case of Jain Irrigation Systems Ltd, - 2015-TIOL-1674-CESTAT-MUM and this Tribunal vide decision dated 26.05.2015 .....

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n the CENVAT credit of the service tax paid under reverse charge mechanism. 6. Learned D.R. on the other hand would draw our attention to the judgement of the Tribunal in the case of Tata Steel Ltd. - 2015-TIOL-2464-CESTAT Mum and submit that the Larger Bench of this Tribunal vide order dated 18.04.2006 held that any amount paid for banks abroad is taxable and extended period can be invoked as also interest and penalty can be levied. He would draw our attention to the said reported case law and .....

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said tax liability but is contesting the imposition of penalties and the demand of interest. 7.1 We find that the challenge of the learned Counsel on the demand of interest is basically on the ground that the said demand of tax was not sustainable on the ground that the show-cause notice is issued for the demand of tax on 11.03.2008 while the fees were paid to various entities during the period October 2004 to September 2006 and the demand of tax was paid on 28.05.2007. We find strong force in t .....

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ent. "This appeal is directed against the impugned order in appeal dated 31.5.2010 passed by the Commissioner (Appeals) upholding the confirmation of demand of service tax, ordering recovery of appropriate interest and imposing penalties under Sections 76, 77 and 78 of the Finance Act 1994. 2. The appellant had availed lending services from service providers based abroad namely, Lehmann and IFC who acted as the Mandated Lead Arrangers, Facility Agents and lenders in relation to Economic Com .....

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n 73 (1) invoking the extended time period for failure to file ST - 3 returns and failure to pay the service tax by suppressing the information of import of service from abroad. Liability to pay penalty equivalent to the tax was also fixed in terms of Section 78. 3. Heard both sides. 4. The ld. counsel appearing for the appellant stated that the service tax was paid by them on 04.02.2010 before the passing of the adjudication order. He stated that the entire exercise is revenue neutral because s .....

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IFC (International Finance Corporation) because proviso (c) of section 3 of the IFC Act does not impose any restriction on service tax exemption and section 9 of the IFC Act enables the Act to override the provisions of the Finance Act 1994. Reliance is placed on Coastal Gujarat Power vs. Commissioner 2012 (28) STR 377 (Tri-Mum). 5. The Id. AR appearing for revenue reiterated the findings of the lower authorities. He stated that the appellant failed to pay service tax and the issue was detected .....

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the issue of the show cause notice and before the passing of the adjudication order. The appellant relies heavily on the judgement cited. Revenue relies on the decision of the Apex court in the case of Kitply Industries (supra). We note that the Apex Court, after considering the Larger Bench decision in the case of Jay Yushin Ltd (supra), observed that the Larger Bench judgement lays down four areas for consideration, namely. "(a) Revenue neutrality being a question of fact, the same is to .....

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on to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods; (d) We express our opinion in favour of the view taken in the case of M/s. Internation Auto Products (P) Ltd. and endorse the proposition that once an assessee has chosen to pay duty, he has to take all the consequences of payment of duty. In the case of Kitply the Supreme Court came to the decision that the Tribunal had rendered its decision only by .....

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