2017 (8) TMI 399

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....y, agency fee and fee for arranging loan amount to such foreign lending arrangers for arranging ECBs. The department was of the view that the fees paid for arranging / obtaining ECG loans would fall under the category of Merchant Banking Services under Banking and Other Financial Services and was liable to service tax with effect from 16.7.2011. Since appellant haven not discharged service tax on such fees paid to foreign financial institutions, show cause notice was issued demanding service tax along with interest and also imposed penalties. After due process of law, the original authority confirmed the demand of Rs. 21,61,584/- along with interest thereon and also imposed penalties under sections 76, 77 and 78 of the Finance Act, 1994. Ag....

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....ty to pay service tax under the reverse charge mechanism and there is no evidence in the show cause notice to establish that appellants had indulged in deliberate suppression. He also argued that the issue whether the assessee is liable to pay service tax under reverse charge mechanism prior to introduction of 66A was under much doubt and confusion and there were several judgments holding in favour of the assessee as well as Revenue. That the appellant had not discharged service tax only on the ground that they were not aware of the provisions of law introduced making them liable to pay service tax by reverse charge mechanism. He argued that the department has taken the necessary details for quantification of service tax from the accounts m....

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....s cooperated and furnished all details. So also appellant had paid entire service tax demand along with interest. Hence, we are of the opinion to extend the benefit of section 80 as the appellant has put forward reasonable cause for non-payment of service tax. We find that the appellant has paid the service tax demand along with interest prior to issuance of the show cause notice and also find that there is no sufficient allegations in the show cause notice for suppression of facts with intent to evade payment of service tax. It is an admitted fact that the very issue of taxability in respect of commission paid to foreign banks had been in confusion, which was laid to rest only after the judgment of the Hon'ble High Court of Bombay in the c....