TaxTMI 
TaxTMI 
2014 (7) TMI 627
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....ECBs (External Commercial Borrowings). On being pointed out by the officers of the Director General of Central Excise Intelligence (DGCEI) Ahmedabad that the appellant was liable to pay service tax on the fees/ charges paid to foreign service providers under reverse charge mechanism, the appellant paid on 18.09.2010 the entire amount of service tax liability of Rs. 2,95,437/- along with interest of Rs. 69,100/- arising out of this transaction. However, the DGCEI authorities issued show cause notice dated 09.02.2011 to the appellant proposing recovery of service tax by invoking extended period of time along with interest and proposed imposition of penalties. The Assistant Commissioner, Central Excise Customs and Service Tax Division-II, Ankleshwer (Gujarat) confirmed demand of service tax along with interest and imposed penalty under section 78 vide his Order-in-Original dated 12.12.2011. On appeal, the Commissioner (Appeals) upheld the Order in Original vide his impugned Order-in-Appeal. 3. Shri Anand Nainavati (Advocate) appearing for the appellant argued that: (a) That the impugned Order-in-Appeal is a non-speaking order inasmuch as it h....
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.... Under Section 66A, services provided from outside India and received in India have been made taxable with effect from 18.04.2006, while in the instant case the taxable services, if any, provided by the foreign service providers have been performed outside India and have been received by the appellant outside India and hence, would not be taxable even after introduction of Section 66A of the Finance Act, 1994. (k) Assuming whilst denying that the appellants are liable to pay service tax on the aforesaid services, the appellants would be entitled to avail CENVAT Credit of service tax paid on the aforesaid services and utilize the same for payment of CENVAT on dutiable goods leading to a revenue neutral situation. He cited the following case laws of the Hon'ble Supreme Court holding that where demand raised against by the Revenue is equal to the credit available to the assessee, then demand is not sustainable: (l) CCE Vs. Narayan Polyplast - [2005 (179) ELT 20 (S.C.)]; (m) CCE Vs. Narmada Chematur - [2005 (179) ELT 276 (S.C.); (n) CCE Vs. Coca-Cola India - ....
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....here the provider of the service has his business establishment both in that country and elsewhere, the country, where the establishment of the provider of service directly concerned with the provision of service is located, shall be treated as the country from which the service is provided or to be provided. (2) Where a person is carrying on a business through a permanent establishment in India and through another permanent establishment in a country other than India, such permanent establishments shall be treated as separate persons for the purposes of this section. Explanation 1. - A person carrying on a business through a branch or agency in any country shall be treated as having a business establishment in that country. Explanation 2. - Usual place of residence, in relation to a body corporate, means the place where it is incorporated or otherwise legally constituted.] [(3) The provisions of this section shall not apply with effect from such date as the Central Government may, by notification, appoint.] The provisions of Rule 3 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 are reproduced below: 3. Taxable services....
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....d that the same interpretation follows on perusal of the provisions of Section 66A of the Finance Act 1994. I am, therefore, not convinced with the appellants argument that the services provided to the appellant by foreign service-providers outside India and received/consumed by the appellant outside India do not attract service tax in terms of the above provisions of law. 7. On the issue of applicability of the provisions of Section 73 (3) of the Finance Act 1994 to the appellant's case, I find that in this case the appellant on being pointed out by the DGCEI deposited the entire amount of service tax liability along with interest on 18.09.2010 much before the issue of show cause notice on 09.02.2011. I find that the appellant is a manufacturer of dutiable goods and the service tax paid on services provided by foreign service-providers would have been available to them as CENVAT Credit under the CENVAT Credit Rules, 2004 leading to a revenue neutral situation. In the facts and circumstances of this case, it is improper to allege that the appellant did not pay service tax with an intent to evade payment of service tax. In a similar case of ECB - Enercon (India) Ltd. vs. Commiss....