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Commissioner of Central Excise, Madurai Versus M/s. Sakthi Sugars Ltd. And Vice-Versa

2018 (2) TMI 156 - CESTAT CHENNAI

Banking and Other Financial Services - the assessee raised funds through issue of Foreign Currency Convertible Bonds (FCCB) in capital markets through overseas lead arrrangers to whom they paid charges in the form of upfront fee, management fee, commitment fee, underwriting fee, out-of-pocket expense, legal fee etc. - period involved is after 18.4.2006 - reverse charge mechanism - Held that: - The Tribunal in assessee's own case M/s. Sakthi Sugars Ltd Versus Commissioner of Central Excise, Salem .....

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By Deptt.) and ST/705/2010 (By Assessee) - Final Order Nos. 40299-40300 / 2018 - Dated:- 1-2-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri B. Ravichandran, Member (Technical) Shri A. Cletus, Addl. Commissioner (AR) for the Revenue Ms. Cynduja Crishnan, Advocate for the Respondent ORDER Per Ms. Sulekha Beevi Both these appeals emanate from the same impugned order and hence they are heard together and are disposed by this common order. 2. Brief facts are that the assessee raised funds .....

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service tax under reverse charge mechanism as provided under section 66A of the Finance Act, 1994. Show cause notice was issued for the period April 2006 to July 2006 proposing to demand service tax along with interest and also to impose penalties. After due process of law, the original authority confirmed the demand of ₹ 31,23,644/- and ordered appropriation of the amount already paid by the appellant and imposed penalty under section 78 and 77 of the Finance Act, 1994. In appeal, Commis .....

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d upheld the demand in respect of the charges paid by the appellant except the demand of legal fees paid by the appellant to the overseas arrangers. The demand on legal fees was set aside by the Tribunal observing that the levy of service tax on legal fee was introduced only with effect from 1.9.2009. For the limited purpose of re-quantification of the demand, eliminating legal fees, the matter was remanded to the adjudicating authority. It was also submitted by the ld. counsel that the Tribunal .....

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ervices on the services rendered by service provider outside India in connection with raising FCCB. The period involved is after 18.4.2006. The appellant has also paid legal fees to the overseas arrangers. The Tribunal has held that the demand on said legal fees cannot sustain for the reason such charges will not fall under Banking and Financial services and that such service has become taxable only with effect from 1.9.2009. The penalties were sought to be set aside on the ground that prior to .....

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vant portion of the decision of the Tribunal in the above final order is reproduced as follows:- 7. On merits, the main ground put forward by the learned Counsel is that, the demand on the legal fees paid to foreign service provider would not fall under the category of Banking & Financial Services. In para 5.2 alongwith charges like, Commitment charges, Out of pocket expenses, Trusteeship fees, Processing fees, Listing fees, Printing fees etc, the demand also includes legal fees. Such servic .....

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