TMI Blog2017 (2) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of the appellant not to discharge the service tax liability on the amount paid as royalty and technical know-how fees. Revenue neutrality is a defence that could be claimed for non-imposition of penalty. The authorities need not have issued any SCN u/s 73(i) of the FA, 1994 to the appellant for imposition of penalties - penalties set aside - appeal allowed - decided in favor of appellant. - ST/324/12 - A/85479/17/STB - Dated:- 11-1-2017 - Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) Shri L. Badrinarayanan, Advocate for appellant Shri D. Nagvenkar, Addl. Commr (AR) for respondent ORDER Per M. V. Ravindran This appeal is directed against order-in-original No. 27/ST/SB/2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y contesting the penalties imposed by the lower authorities. It is the submission that the CBEC s Circular dated 17.09.2004 and the judgement in the case of Reliance Industries Ltd. 2016 (44) STR 82 (Tri. Mum) covers the issue in their favour. He relied upon the jugement of the Tribunal in their own case reported at 2006 (3) STR 716 (Tri. Mum) and also the following cases:- 1. Rochem Separation Systems (India) Pvt. Ltd. 2015 (39) STR 112 (Tri. Mum) 2. Jain Irrigation Systems Ltd. 2015 (40) STR 752 (Tri. Mum) 3. Indian Hotels Co. Ltd. 2016 (42) STR 927 (Tri. Mum) 6.1 It is his further submission that the service tax liability which is being fastened upon the appellant is under reverse charge mechanism and as such th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owards the tax liability and interest. Since the appellant is not seriously contesting the tax liability and the interest thereof, we uphold that part of the order. 8.2 As regards the penalties imposed under Section 76, 77 and 78 of the Finance Act, we find that the entire argument of the learned D.R is that adjudicating authority imposed the penalties as the appellant had suppressed the fact of payment of such amount to the parent organisation and the sister concern and deliberately refrained from proper filing of ST-3 returns inasmuch as they have not declared the factum of providing of services (services received from outside India). In our view the findings recorded by the adjudicating authority suffers from misconstrued and misunder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yet another angle, the entire exercise of demand of tax on reverse charge is a revenue neutral situation. Undoubtedly the appellant could have availed the CENVAT credit of the service tax paid under reverse charge mechanism, which would mean that there may be no intention on the part of the appellant not to discharge the service tax liability on the amount paid as royalty and technical know-how fees. Revenue neutrality is a defence that could be claimed for non-imposition of penalty. In our view, the judgement of this Tribunal in the case of Jain Irrigation Systems Ltd. (supra ) will squarely applies wherein in paragraph 6 and 6.1 the Bench held as under:- 6. We have carefully gone through the facts of the case and considered the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty. In the case of Kitply the Supreme Court came to the decision that the Tribunal had rendered its decision only by reference to clause (c) above and the other clauses (a), (b), and (d) were not considered. Therefore the Apex Court remanded the matter to the Tribunal. We have considered all the clauses a, b, c and d above. We find in the present case there is no situation of availability of any alternate scheme for payment of duty. Neither was any scheme misused by the appellant. Therefore clauses (a) and (b) are not applicable to the facts of the present case. Quite apparently, clause (d) too does not apply. In the present situation it is merely a case of applying clause (c) above. The revenue neutral situation comes about in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X
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