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2016 (8) TMI 718
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....in consultancy services to M/s Onconova Therapeutics Inc. USA in the year 2002 -2003. The payment for the service was not received and the amount was written off in the books of account of the appellant. Subsequently, on 15-09-2006, the appellants received the amount of USD 30,000/- as consideration for services and this was recorded in their books as bad debts recovered @ Rs. 14,64,367/-. A service tax audit was conducted for the period February, 2007 to January, 2008 and the officers directed the appellants to pay service tax on the bad debts recovered from M/s Onconova. Accordingly the appellants paid service tax along with interest on 28-02-2008. The appellants entertained the view that the services provided to Onconova was export of se....
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....alleging that appellant failed to pay service tax on the amount of FCIR of USD 30,000/-(Rs.14,64,368/-) received form Onconova Inc. USA and accounted in their books as recovery of bad debts. During the investigation itself, the appellants had paid service tax of Rs. 1,61,086/- and interest amount of Rs. 20,999/-, which is the subject matter of refund claim stated above. Pursuant to investigation, a show cause notice dated 13-09-2010 was issued proposing to demand and recover service tax along with interest on the income of Rs. 14,64,368/- realised by appellants from Onconova, and also proposing to appropriate the amount of Rs. 1,61,086/- paid by the appellants. The show cause notice also proposed to impose penalty u/s 76 and 78. The appella....
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....nts as bad debts recovered .The Notification No.6/99-ST dated 09-04-1999 exempts from payment of service tax when the consideration for taxable services is received in India in convertible foreign exchange. The said notification was rescinded by notification No.2/2003 dated 01-03-2003. Consequent to this, service tax would be leviable on all taxable services consumed or rendered in India irrespective of whether the payment thereof is received in foreign exchange or not. Subsequently, the exemption was reinstated by issuing notification No.21/2003, dated 20-11-2003. There was doubt whether services for which consideration was received in FCIR during the intervening period between 01-03-2003 and 20-11-2003 would be exigible to Service tax. ....
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....) is squarely applicable to the facts of this case. I therefore, hold that the demand of service tax on consideration received by appellant from M/s Onconova Inc. USA and the imposition of penalty thereto, is unsustainable. In view thereof, the impugned order in Appeal No.2672/2012 is liable to be set aside. 5. The next issue to be addressed is the claim of refund made by appellants in appeal No.2690/2012. The appellants deposited the service tax of Rs. 1,61,086/- along with interest of Rs. 20,999/- on 28-02-2008 on the consideration received from M/s Onconova Inc. USA The appellants have filed the refund claim contending that no service tax is payable by them for the export of services made during the period 2002-2003. The refund claim ....
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....e three categories are the remedies provided under the Excise and Customs Act. None of the above categories would attract to the case in hand. In this case, the levy was purely on account of mistake of fact in understanding the law. The petitioner assumed that the transaction, for which he has paid tax, is covered under the law. The law does not cover such transaction for payment of service tax. Therefore, it is not on account of any mistake of law but mistake on fact the service tax was paid. In that view of the matter it has no colour of tax for the purpose of levy by the department. The distinguishing feature for attracting the provisions under section11B is that the levy should have the colour of validity when it was paid and only conse....