TMI Blog2019 (1) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... tive from 10th May 2008, to apply in such instances of import of services to that which is relevant only for the valuation of the service. Accordingly, the discharge of tax liability on the billing raised by the de facto provider of service cannot be faulted - The tax liability on the value of ‘intellectual property services’ is required to be adjusted to the extent of cess paid under the appropriate legislation. Penalty u/s 78 of FA - Held that:- The discharge of tax liability by the appellant on the appropriate and proper determination of liability would suffice to exclude the scope for imposition of penalty under section 78 of Finance Act, 1994 - Moreover, the appellant had no reason to attempt to evade this tax in view of the eligibi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th their parent organisation outside India while at the same time demanding tax, without reference to this discharge, all over again merely for want of the registration as provider of intellectual property services incorporated in section 65(105)(zzr) in Finance Act, 1994. 2. It is also alleged, and held, that the tax liability, in transactions between associated entities, arises upon posting in books of accounts and is not in any way concerned with the date on which the bills for the taxable service are raised by the provider and, thereby, entailing delayed payment of tax, this, according to us, is contrary to the deeming fiction of recipient being the provider and the provisions of Taxation of Services (Provided from Outside Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax in Service Tax Rules, 1994 but as deemed provider; this coalescing of the provider and the recipient in the same person fictionally obliterates the existence of the overseas provider. Accordingly, it would be incorrect to read the provisions of Explanation in section 67 of Finance Act, 1994, effective from 10th May 2008, to apply in such instances of import of services to that which is relevant only for the valuation of the service. Accordingly, the discharge of tax liability on the billing raised by the de facto provider of service cannot be faulted. 5. The tax liability on the value of intellectual property services is required to be adjusted to the extent of cess paid under the appropriate legislation. 6. The discharge o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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