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M/s. Cipla Ltd Versus Commissioner of Central Excise, Mumbai-I

2017 (11) TMI 775 - CESTAT MUMBAI

Banking and Other Financial Service - services received by the appellant from the foreign collaborator - Rule 6(5) of the Cenvat Credit Rules, 2004 - Held that: - all the issues such as revenue neutrality, period of service and limitation has to be considered in the facts of the present case, which have not been considered - As regard the revenue neutrality even though the Cenvat credit is available to the appellant, the fact that during the relevant period appellant were discharging excise duty .....

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Appellants Ms. P. V. Shekhar, Joint Commissioner(A.R.) for the Respondent ORDER Per : Ramesh Nair The appellant are engaged in the manufacture and sale of pharmaceutical products. The appellant had offered for purchase of Global Depository Shares (GDS) and entered into purchase agreement dated 12-4-2006 with M/s. CLSA Singapore Pvt Limited, Singapore and M/s. Kotak Mahindra (International) limited, Mauritious for initial purchase of the aforesaid GDS. The appellants vide letter dated 31-3-2006 .....

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wherein department was of the view that appellant had paid certain fees/charges to foreign service providers for arrangement of GDS and that services rendered by the said service providers to the appellant appeared to be Banking and Other Financial Service (Merchant Banking Service), which is liable to service tax and service charges paid for the said service appeared to be taxable value for service tax. The show cause notice also invoked extended period for demand for service tax. The adjudicat .....

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id service tax on the aforesaid alleged import of services, the appellants would have entitled to avail credit of the same. The appellants have already paid the service tax under protest therefore entire exercise would become revenue neutral, accordingly, no demand would survive in such situation, therefore impugned order is liable to be set aside on this count alone. In this regard he placed reliance on the following judgments (a) Jain irrigation system Ltd Vs. Commissioner[2015(40)S.T.R. 752 ( .....

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o the extent there is no loss to the government the interest cannot be demanded. As regard the invocation of extended period for demand of service tax, he submits that since entire situation is revenue neutral there cannot be any allegation of suppression of facts with intention to evade payment of service tax. He submits that Section 66A of the Finance Act, 1994 came into force 18-4-2006, during the disputed period the levy of service tax under Section 66A of the Finance Act 1994 was subject to .....

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that issue involved in the present case is of interpretation of law, for this reason also extended period could not have been invoked. He submits that appellant were paying service tax to the tune of ₹ 11 crores annually and maintaining regular books of account therefore there cannot be allegation that appellant had intention to evade payment of service tax amount of ₹ 83,68,527/- which appellant immediately paid alongwith interest before issuance of show cause notice. He further sub .....

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that activity undertaken by the foreign collaborator is not covered under banking and other financial service therefore demand of service tax under the head of banking and other financial service will not sustain. In any case the appellant are not liable to pay service tax on the underwriters service as the same falls under Rule 3(1)(ii) of the Taxation of services(provided from outside India and received in India) Rules, 2006. In the present case admittedly the foreign collaborator have provid .....

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1994, therefore no show cause notice should have been issued, consequently no penalty could have been imposed. 3. On the other hand, Ms. P.V. Shekhar, Ld. Joint Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. She submits that as regard the merit of the case the issue is squarely covered in the following judgments in case of Tata Steel Ltd Vs. Commissioner of Service Tax, Mumbai-I[2016(41)S.T.R. 689(Tri. Mumbai)]. She further submits that as re .....

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the condition, fees was suppose to be paid only when the transaction is consummated. The invoice was raised on 16-5-2006, this shows that service was rendered after 18-4-2006, accordingly, claim of the appellant fails. She submits that whether service was rendered is underwriter and not BOFS, appellant placed reliance on the order of the Jublilant life sciences Ltd Vs. CCE [2013(29)STR 529]. In this regard she submits that fact of the present case is different from the case of Jublilant Life sc .....

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nt had not taken registration under banking and financial service and also not filed ST3 returns. In this position appellant had malafide intentions and they have suppressed the facts, accordingly extended period of limitation as well as provision of Section 76, 77 and 78 were correctly invoked. 4. We have carefully considered the submissions made by both sides and perused the records. 5. We find that appellant have raised multiple defence such as Revenue neutrality, whether the services provide .....

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