TMI Blog2018 (11) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... as only after the Supreme Court’s decision in the Indian National Shipowners case [2009 (12) TMI 850 - SUPREME COURT OF INDIA], the issue had attained finality. There were reasons to entertain a reasonable belief. The appellants have also paid the penalty of 25% before the issue of show-cause notice - penalty not imposable - appeal allowed - decided in favor of appellant. - ST/69/2009-DB - - - Dated:- 2-8-2018 - MR. S.S GARG, JUDICIAL MEMBER And MR. P. ANJANI KUMAR, TECHNICAL MEMBER Shri S. Ramasubramanian, CA For the Appellant Dr. J. Harish, Dy. Commissioner(AR) For the Respondent ORDER Per: P ANJANI KUMAR M/s. Fosroc Chemicals (India) Pvt. Ltd., the appellants are manufacturers of chemicals used in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax under reverse charge is liable to be paid w.e.f. 18/04/2006 only. The learned counsel submitted that as there was tremendous amount of confusion with regard to levy of service tax on import of services, the matter had been finally settled by Hon ble Supreme Court in the case of Indian National Shipowners Association (supra). The appellant relies upon the decision of the Chennai Bench of the Tribunal in the case of Kikani Exports Vs. CCE [2014(36) STR 639 (Tri. Chennai)] wherein on a similar issue, Hon ble Tribunal has set aside the penalty levy under Sections 76, 77 78. They also relied upon the following decisions. i. Jindal Saw Ltd. Vs. CCE [2013(30) STR 490 (Tri. Ahmd.)] ii. CST Vs. Motor World [2012(27) STR 225] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the case of Jubiliant Enpro (P) Ltd. Vs. CCE, Noida [2015(38) STR 625 (Tri. Del.)] and submitted that plea of bona fide belief was not sustainable as the assessee was not some small time operators. Mere uttering of words bonda fide belief‟ was not sufficient. It has to be informed belief of a reasonable person. For service provider of stature, something positive has to be shown to demonstrate that they have made reasonable efforts or has taken reasonable steps to ascertain legal position with regard to taxability of their impugned activities for the purpose of forming the purportrated reasonable belief. 4. Heard both sides and perused records. 5.1. We find that both the Department and the appellants have no dispute regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere providing management consultancy service in the cases cited by the learned AR. 5.2. As discussed above, there were reasons to entertain a reasonable belief. The appellants have also paid the penalty of 25% before the issue of show-cause notice. Therefore we find that there is considerable merit in the argument of the learned counsel for the appellants. The issue regarding the tax liability on recipients of services got settled only by the decision of Bombay High Court and the Hon ble Apex Court in the case of Indian National Shipowners Association, which decisions came much later and there was considerable confusion among the tax payers on this issue. In such a situation, it is not justified to impose penalties. We also find that Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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