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TMI Blog2008 (8) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... x demand of Rs. 1,83,10,592/- under Section 73 (1) of the Finance Act, 1994, by invoking extended period of limitation, along with interest at the applicable rate on this amount as per the provisions of Section 75, (b) imposed penalty of Rs. 1,000/- under Section 77 of the Act and penalty of Rs. 100/- per day under Section 76 of the Act for failure to pay the service tax till the payment of the entire amount of tax and (c) penalty of Rs. 1,83,10,592/- on the Appellant under Section 78 of the Act. 2. Heard both the sides. 2.1 Shri J.K. Mittal, Advocate, the learned counsel on behalf of the Appellants, made the following submissions :- (1) M/s Callison, not being registered as an Architect in the register of Architects maintained under Section 23 of the Architects Act, 1972, is not an Architect within the meaning of this term, as defined under Section 65 (6) of the Act and, therefore, the services received by the Appellants are not the services received from an Architect and hence the same are not taxable. (2) Under entry 92C of the List I of 7th Schedule of Constitution of India, the Government of India has powers to levy tax only on the service provided in India it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 73 (1). There is no suppression or intention to evade the tax in this case. Moreover during the period of dispute, on account of conflicting judgments on the issue of liability of service recipient in case of import of service, to pay the service tax, the Appellants were under bona fide belief that they were not liable to pay the tax. Moreover Hon'ble Supreme Court in case of Continental Foundation Jt. Venture vs. CCE, Chandigarh, reported in 2007 (216) E.L.T. 177 has held that mere omission to give correct information is not suppression of facts unless it was deliberate with intention to evade the payment of tax and that when due to certain reasons, there is doubt about liability to pay the duty, extended period under Section 11A is not invokable. 2.2 Shri A.K. Madan, the learned Departmental Representative, made the following submissions. (1) In view of a specific provision in agreement between the Appellant and M/s Callison that all the taxes and levies imposed outside the US are the responsibility of the client, i.e. the Appellants, the Appellants are liable to pay the service tax. In this regard, reliance is placed in Hon'ble Kerala High Court's judgment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t part covers any person whose name is entered in the register of architects maintained under Section 23 of the Architect's Act, 1972 and the second part i.e. the inclusive part, covers any commercial concern engaged in any manner, whether directly or indirectly in rendering the service in the field of architecture. While there is requirement of registration in the register of architects maintained under Section 23 of the Architect's Act, 1972 for individual persons covered by the first part of the definition, there is no such registration requirement for the second part of the definition, which covers the commercial concern engaged in any manner, whether directly or indirectly in rendering the services in the field of architecture. M/s Callison, without any doubt, are a commercial concern engaged in rendering services in the field of architecture and therefore they are covered by the second part of the definition of architect. Since M/s Callison are covered by the definition of architect, the service provided by them to the Appellants is a taxable service under Section 65 (105) (p) of the Act. 3.4 The second plea of the Appellants is that even if the service provided by M/s Calli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise, in whose jurisdiction the taxable services have been rendered, a return containing prescribed details. The very existence of proviso to Rule 6 (2) of Service Tax Rules, 1994 indicates that even prior to 18/04/06, the date on which Section 66A was introduced, import of taxable service by a mode, where foreigner/non-resident service provider not having any office in India provided some taxable service from India to a person in India, was taxable under Section 66 read with Section 65 (105) of the Finance Act and during period prior to 16/8/02, in such cases either the foreign/non-resident service provider could pay the service tax himself or he could authorize some other person to pay the service tax on his behalf. But since the system of payment of service tax either by the foreigner/non-resident service provider or by a person authorized by him did not work, the proviso to Rule 6 (1) was deleted and Rule 2 (1) (d) (iv) was introduced by Notification No. 12/02-ST dated 01/08/02 issued under Section 94 of the Central Excise Rules (effective from 16/8/02) which provided that person liable for paying service tax in relation to any taxable service provided by a person who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the import of service by all possible modes came w.e.f. 18/4/06 when Section 66A was introduced in the Finance Act, 1994 and simultaneously Taxation of Services (Provided from outside India and Received in India) Rules, 2006 were notified vide Notification 11/2006-ST dated 18/4/06. But as discussed above, so far as the taxable services provided from India by a foreigner or non-resident, not having any officer or business establishment in India to a person in India are concerned, these services were taxable even prior to 18/4/06 under Section 66 read with Section 65 (105) of the Finance Act, 1994 and by virtue of Rule 2 (1) (d) (iv) of the Service Tax Rules, 1994 read with Notification 36/04-ST dated 31/12/04 issued under Section 68 (2) of the Finance Act, 1994, the recipient in India, was liable to pay the service tax. 4. In this case, from the agreement of the Appellants with M/s Callison, U.S.A., it is clear that the officials of M/s Callison had visited the Appellant's project site and the office and had a series of meetings with the Appellants, from which it is clear that the taxable service had been provided by M/s Callison to the Appellants from India. Since M/s Callison d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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