Appeal partially allowed, demand reduced with penalties adjusted.

The Tribunal partially allowed the appeal, reducing the confirmed demand to Rs. 2,07,96,620/- along with interest and a mandatory equal penalty. The penalty under Section 77 was reduced to Rs. 1000, and the penalty under Section 76 was set aside.

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Issues Involved:
1. Classification of services rendered to Transocean and Tide Water.
2. Classification of services rendered under 'sales representative agreements'.
3. Allegation of willful misstatement/suppression of facts.
4. Applicability of exemption for services paid in convertible foreign currency.
5. Simultaneous imposition of penalties under Sections 76 and 78.
6. Computation of the impugned demand.

Detailed Analysis:

1. Classification of Services Rendered to Transocean and Tide Water:
The appellants were accused of providing Management Consultancy Services to Transocean and Tide Water. The services included advising on commercial aspects, assisting in obtaining work, and advising on government regulations, among others. The Adjudicating Authority classified these services under Management Consultancy Service, invoking the definition under Section 65(65) and Section 65(105)(r) of the Finance Act, 1994. The appellants argued that their services were executionary rather than advisory and should be classified under Business Support Service or Business Consultancy Service, which came into effect later. However, the Tribunal found that the services were advisory in nature and directly connected with the management of the companies, thus falling under Management Consultancy Service.

2. Classification of Services Rendered Under 'Sales Representative Agreements':
The services rendered under 'sales representative agreements' to companies like Helicopter Asia were classified as Business Auxiliary Service. The appellants contended that these services were export of service and should be exempt. The Tribunal held that the services clearly involved the promotion of the service recipients' goods/services, fitting the definition of Business Auxiliary Service under Section 65(19) of the Finance Act, 1994. The claim for exemption under Notification No. 13/2003-ST as commission agents was rejected as the appellants did not meet the definition of a commission agent.

3. Allegation of Willful Misstatement/Suppression of Facts:
The appellants were accused of willful misstatement/suppression of facts for not registering, filing returns, or paying service tax. They claimed a bona fide belief of non-liability. The Tribunal found no basis for this belief as the appellants did not provide evidence of seeking legal advice or consulting professionals. The Tribunal concluded that the appellants deliberately avoided registration and payment of service tax, justifying the invocation of the extended period and mandatory penalty.

4. Applicability of Exemption for Services Paid in Convertible Foreign Currency:
The appellants argued that services paid in convertible foreign currency were exempt from service tax. The Tribunal agreed that services paid in foreign currency were exempt, except for payments received from ONGC in Indian Rupees. The Tribunal cited the Supreme Court judgment in J.B. Boda and Co. Pvt. Ltd. Vs. CBDT, emphasizing that payments in Indian Rupees cannot be treated as foreign exchange without RBI's involvement.

5. Simultaneous Imposition of Penalties Under Sections 76 and 78:
The appellants argued that penalties under Sections 76 and 78 could not be simultaneously imposed. The Tribunal agreed, citing several judgments from the Punjab & Haryana High Court, and set aside the penalty under Section 76 while reducing the penalty under Section 77 to Rs. 1000.

6. Computation of the Impugned Demand:
The appellants questioned the computation of the demand, which was addressed by the Adjudicating Authority. The Tribunal noted that the appellants did not provide documentary evidence to dispute the computation during the adjudication process, thus rejecting this plea at the appellate stage.

Conclusion:
The Tribunal partially allowed the appeal, modifying the impugned order to reduce the confirmed demand to Rs. 2,07,96,620/- along with interest and a mandatory equal penalty. The penalty under Section 77 was reduced to Rs. 1000, and the penalty under Section 76 was set aside.

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