TMI Blog2018 (9) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... ipient of services needs to discharge their service tax liability as if such services have been performed in India. It is categorically been provided that even if a part of borrowings have been used abroad for the business purposes, the facts remain that recipient of services is based in India and therefore, as per the provisions Section 66A of Finance Act, 1994 read with relevant rules, the appellant assessee should have discharged their service tax liability in India, on the amount of commission paid by them as the value of services received by them from abroad - Thus, the appellant-assessee are legally liable to pay service tax on the service of foreign institutions availed in getting their ECBs. Time Limitation - Held that:- Since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m abroad, the appellant have engaged M/s. Elara Capital and other agencies, who were based in London, for arranging such external commercial borrowings. After the necessary funds have been arranged by M/s. Elara Capital and others for which they have raised certain invoices indicating their charges in foreign currency for providing services of arranging ECB to the appellant abroad. 2. During the Audit of the CERA, it was noticed by the department that the appellants have not discharged their service tax liability under the category of Banking and Other Financial services as defined under section 65 (105) (zm) of Finance Act, 1994. It has been the contention of the department that as per the provisions of section 66A of the Finance Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the appellant has been in correspondence with the department since July, 2007. It has further been added that a letter from the office of the Directorate General of Central Excise Intelligence, Chennai dated 31.7.2007 was received by them and a due reply of the same was given on 18.8.2007 on this issue of commission paid to the appellant. It is further submitted that the foreign based service provider assessee has not heard anything from the department whether any service tax is payable on the services received by them from the service provider based abroad. Therefore, the appellant assessee presumed that the matter is closed by the department being satisfied by the reply given by them. It has also been mentioned that a show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices have been performed in India. It is categorically been provided that even if a part of borrowings have been used abroad for the business purposes, the facts remain that recipient of services is based in India and therefore, as per the provisions Section 66A of Finance Act, 1994 read with relevant rules, the appellant assessee should have discharged their service tax liability in India, on the amount of commission paid by them as the value of services received by them from abroad. Thus, we hold that appellant assessee are legally liable to pay service tax on the service of foreign institutions availed in getting their ECBs. 6. Coming to the second question whether the demand is barred by limitation, in view of the fact that there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. So far as the show cause notice pertains to Jaipur II Commissionerate, it had apparently been dropped saying that the activity in question was enacted at Delhi and for which the concerned Commissionerate has already issued Show cause notice and therefore, the show cause notice issued for same period on same issue for Bhiwadi Unit has been withdrawn. This fact, in our opinion goes against the argument of appellant that even after coming to know that service tax is apparently payable by them on the services availed by them from abroad, however, they chose not to take any proactive steps in discharging their service tax liability. The Section 68 of Finance Act casts a responsibility on the service provider to pay service tax. In this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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