2017 (9) TMI 30

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....t services. On investigation it was found that they have availed taxable service of merchant banking service falling under category of Banking & Other Financial Services rendered by service providers outside India in connection with raising Foreign Currency Convertible Bonds, by paying various fees for the period April 2006 to July 2006 and failed to discharge service tax on such taxable services under the reverse charge mechanism even after introduction of Section 66A with effect from 18.4.2006. On perusal of records it was found that out of the total value of Rs. 10,55,99,873/- the tax liability of Rs. 65,48,020/- relates to their Modakurichi Unit and separate Show Cause Notices were issued to both units. Appeal ST/174/2008 relates to Mod....

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....ervice tax is not liable to be paid on commission/fees paid to service providers outside India under reverse charge mechanism. That appellants did not discharge service tax only on bonafide belief and the period involved is immediately after 18.4.2006 the crucial date. ii. That in any case, the appellant had not suppressed facts and entire accounts were furnished to department when called for. The demand is raised on such accounts. This being so, the Show Cause Notice issued invoking extended period is unsustainable. She relied upon the decision of Tribunal in the case of Indofil Chemicals Company Vs Commissioner of Service Tax, Mumbai 2016 (46) STR 507 (Tri-Mum), Persistant System Ltd Vs RST, Pune 2016 (45) STR 177 (Tri Mum) and Punjab ....

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....epartment. He submitted that the Show Cause Notice issued invoking extended period is legal and proper. 6. Heard both sides. 7. On merits, the main ground put forward by the learned Counsel is that, the demand on the legal fees paid to foreign service provider would not fall under the category of Banking & Financial Services. In para 5.2 alongwith charges like, Commitment charges, Out of pocket expenses, Trusteeship fees, Processing fees, Listing fees, Printing fees etc, the demand also includes legal fees. Such services have become taxable only with effect from 1.9.2009 and therefore the demand on legal fees in our view is unsustainable. On such score, for the limited purpose of requantification of the demand eliminating legal fees, ....