TaxTMI 
TaxTMI 
2014 (12) TMI 598
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.... to 30.09.2005. (ii) The scope of services rendered by the appellants to M/s. Transocean and M/s. Tide Water, were listed in the agreement entered into by the appellant with these entities and are described in the table below:- S.NO. ACTIVITIES PERFORMED 1. Assist the company in obtaining work at acceptable rates; 2. Advise and assist the company on the commercial aspects of preparation of bids and subsequent contract negotiations; 3. Keep the Company advised on current developments in the territory which may affect its business and operations; 4. Upon request, advise the Company regarding securing Government licenses, permits and certificates as may be required with respect to its business and operations; 5. Upon request, advise the Company regarding obtaining visas and labour permits for entry into and departure from India of the Companys personnel in connection with any Work; 6. Advise the Company from time to time on the importation into and exportation out of India of all vessels, equipment, supplies, materials and consumables requested by the Company in connection with any Work; 7. Assist the Company on the importa....
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....Waters, Continental Shelf, Exclusive, Economic Zone and other Maritime Zones Act i. Customs Act and; 17. Advise the Company with respect to current economic and political developments in India. (iii) The appellants had also entered into 'Sales Representative' agreements with M/s. Halicopter Asia (PTE) Ltd., M/s. Honeywell International Inc., M/s. Standard Aero Ltd., M/s. ST Aerospace Engineering (PTE) Ltd. and M/s. Northstar Aerospace. The service rendered under the said agreements was in connection with the promotion of sale of goods/services of the said foreign supplier in India. The Adjudicating Authority confirmed the demand alongwith interest and penalties invoking extended period holding that: (i) service rendered to Transocean and Tidewater groups fell in the category of Management Consultancy Service, (ii) service rendered under 'sales representative agreements' to Helicopter Asia et al fell under Business Auxiliary Service and (iii) the appellants were guilty of wilfull misstatement/suppression of facts with intent to evade service tax. 3. The appellants have contended as under:- (i) The term 'Management Consult....
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....vice which came into effect from 01.05.06, or under Business Consultancy Services which was incorporated with effect from 01.06.2007. (v) They also referred to the following judgments among others:- (a) Glaxo Smithkline Pharmaceuticals Ltd. Vs. CCE 2004(188) ELT-171 (Tri.-Mum.) (b) Commissioner of Central Excise Vadodara Vs. Arvind Narayan Prasad Nopary 2008 (11) STR 353 (Tri.-Ahm). (c) Board of Control for Cricket in India Vs.CST 2007-TIOL-684-CESTAT-MUM. (d) Telephone Cables Ltd. Vs. CCE 2007 (7) STR 657 (Tri.-Del) (e) Bharti Televentures Ltd. Vs. Commissioner of Central Excise Delhi-I 2013 (30) STR 148 (Tri.-Del.) (vi) So long as the consideration was received in convertible foreign currency, the service tax was exempt during the entire period by virtue of it being export of service. (vii) As regards a part of payment received by the appellants from ONGC in respect of service rendered to the foreign service providers (M/s. Tidewater and M/s. Transocean) the same is to be considered as payment received in convertible foreign currency because ONGC was required to pay a quantum of sum in foreign currency to the same foreign service providers who were to pay....
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....ning the work and not working the plan. He also referred to CBEC Circular No. 1/2001-ST (section 37B) dt. 27.06.2001 wherein the expression 'Management' in 'Management Consultancy' have been elucidated to stress the point that the impugned service fell in the category of 'Management Consultancy Service. 5. As regards the payment received directly from ONGC. Ld. AR said that the same having been received in Indian Rupees from an Indian Company cannot be called to have been received in foreign exchange. As regards the service rendered to M/s. Helicopter Asia et al, he conceded that as the payment was received in foreign exchange the CESTAT Larger Bench judgment in case of Paul Merchants Vs. CCE, Chandigarh 2013 (29) STR 257 (Tri.-Del) would be applicable. 6. We have considered the submissions made by both sides. A careful perusal of the appellants services to M/s. Transocean and M/s. Tide Water detailed is para 2 above makes it clear that the appellants were advising the clients about various aspects relating to Management. The services are not executionery in nature and are clearly advisory in nature. The definition of 'Management Consultant' is so worded that the services per....
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....as the subject matter of M/s. Glaxo Smithkline Consumer Healthcare Vs. CC, Mumbai -II (supra) was essentially in regard to market development, marketing and sales and hence was not similar to the impugned service. The service involved in the case of Bharti Televentures (supra) was essentially liaisoning. Indeed, none of the other case laws cited by the appellants for pressing that the impugned service is not Managements Consultancy Service dealt with service of the nature described in para 2 above. 7. Regarding the appellants contention that the said services would be appropriately covered in the category of support services of business or commerce, or Business Consultancy Service, the same is not tenable because as per the definition of support service for business or commerce, the activities covered thereunder are essentially executionery in nature. Further the impugned service clearly fell under the scope of Management Consultancy service as analysed earlier and therefore the conversion of Management Consultancy Service into Management or Business Consultancy Service would make no difference whatsoever about the appellants liability. We are not eager to discuss this argument....
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....bay High Court judgment in the case of India Hume Pipe (Supra) was also in relation to Income Tax Act and there too RBI had been kept in the loop. Thus, the ratio of these judgments particularly of the judgment of Supreme Court in the case of GB Boda (supra) is that for treating such payments as payments received in foreign exchange, RBI's nod should be there which is absent in the present case. It is pertinent to mention that once the RBI is taken in the loop, such transactions will not go unnoticed for the purpose of the relevant data bases of Indias international trade and foreign exchange transactions and will also not remain under the radar of the laws relating thereto. Thus, the impugned payments made by ONGC to the appellants do not merit to be treated as payments received in foreign exchange. 9. As regards the services rendered under the 'sales representative agreements to Helicopter Asia(PTE) and others, we have perused a representative agreement. We find that it clearly and conspicuously covers promotion of the service recipients' goods/services in given territory (para 2 of the agreement) and therefore squarely falls within the definition of Business Auxiliary Servic....
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....on/willful misstatement can't be sustained. But mere uttering of the words 'bonafide belief' does not even make it a belief, leave alone bonafide belief. For example, an individual having an annual income of several lakhs of Rupees, when caught can't get away by simply claiming that he was under bonafide or reasonable belief that he was not liable to pay income tax. Bonafide or reasonable belief has to be an informed belief of a reasonable person. For a service provider of this stature, something positive has to be shown to demonstrate that they had made reasonable efforts or had taken reasonable steps to ascertain legal position with regard to taxability of their impugned activities for the purpose of forming their purported reasonable belief. Mere presumption of non-taxability can never be equated to 'reasonable belief' in that regard. Thus, the conclusion is inescapable that they deliberately did not take registration and pay the impugned service tax with a view to escaping the liability and when caught, pretended to be having reasonable belief about the non-taxability. Thus invocability of extended period and mandatory penalty is unexceptionable. 11. As regards to appellant'....