TMI Blog2017 (10) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... and database access or retrieval or both in electronic form through computer work in any manner - In the present case appellant have booked communication and technical fees under the head of expenditure in foreign currency, further this expenses related to payment towards IT cost charged by the BC Components International BV, Netherland. Merely because the total cost charged by the BC Components International BV, Netherland is allocated to the various companies based on the logical basis like number of users, system usages etc, it cannot be said that appellant have not received service and paid consideration thereof. The appellant emphasized that activity is not taxable only because appellant are making payment only for cost sharing does not have any force. Taking into consideration overall facts, it is clear that appellant have received the service and paid consideration to BC Components International BV, Netherland therefore they are liable to pay service tax on reverse charge mechanism. Time limitation - Held that: - appellant have not disclosed the said arrangement to the department and it is only came to the notice of the department while conducting audit therefore appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d)(iv) of Rule 2 of the Rules for the period 2006-07, 2007-08 and 2008-09(up to 15.5.2008) amounting to ₹ 46,84,276/- for which show cause notice dated 29-6-2011 was issued to the appellant and the same was adjudicated by the Adjudicating authority whereby demand of service tax proposed in the show cause notice was confirmed. On being aggrieved by the Order-in-Original, appellant an preferred appeal before the Commissioner(Appeals), who upheld the Order in Original No.STC/P.III/133/ADC/2012-13 dated 23-8-2012 and rejected appeal filed by the appellant, therefore appellant are before us. 2. Shri. Sanandan Khairnar, Ld. Counsel appearing on behalf of the appellant submits that in the present case the fact is that demand of service tax was made on the cost which is on sharing basis reimbursed to their associate group company in the abroad against the IT facility availed by them. He submits that since associated group company is giving facilities to all the Vishay Group worldwide entity, there is no provision of service, however it is only re-imbursement of cost of facility provided by the associated group company M/s. BC Components International BV, Netherland. This arrangeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication/infrastructure and charges cost without mark up used to get allocated based on the site users and communication link. In the said arrangement there is no provision of service from BC Components International BV, Netherland to the appellant therefore no service tax is chargeable. He further submits that the demand was made invoking extended period of limitation, he submits that appellant is an 100% EOU and the activities are closely supervised by the department as per the circular no. 88/98-Cus. Dated 2-12-1998 therefore it cannot be said that appellant willfully suppressed any information/fact from the department therefore no suppression of fact on the part of the appellant. He further submits that department conducted audit in 2008 and issued a show cause notice after lapse of 2 = year having knowledge of activity undertaken by the appellant, for this reason also limitation period cannot be invoked. He further submits that if at all liability of service tax is sustained, the same is available as Cenvat credit to the appellant therefore there is no loss to the government exchequer as the entire issue is of revenue neutrality. For this reason also there cannot be any malafid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly the relationship is clearly of service provider and service recipient. As regard the classification of service, we find that as per Section 65(75) of the Finance Act, online information and database access for retrieval means providing data or information retrieval or otherwise to the consumer in electric form or through computer network. As per 65(105)(zh) taxable service means any service provided or to be provided to any person by any person in relation to online information and database access or retrieval or both in electronic form through computer work in any manner. In the context of the present case as per the nature of the service it is internet service and online information service that includes database service, provision of information on website, data retrieval etc. Internet service provider provides access to the website through computer networks and the websites. The also provides dedicated lease licence, they are integral part of the internet operation and without their service data or information can neither access nor retrieved, therefore service of internet service provider is liable to service tax. In the present case appellant have booked communication and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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