2018 (8) TMI 560

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.... have heard Shri Pawan Kumar Singh learned A.R. appearing for the Revenue and Ms. Stuti Saggi learned advocate appearing for the respondent. 3. As per facts on record, the respondent is registered with Service Tax Department for payment of service tax under the head of transport of goods by roads as also under Banking and other financial services. The appellant was obtaining 'External Commercial Borrowings' (ECB) in term of approval granted by the Government of India/RBI for purchase of capital goods for their manufacturing plant at Balrampur. They availed ECB from various Financial Institutions based abroad, which also had their branches/offices in India at Kolkata and who were discharging all their tax liabilities accordingly. 4. The di....

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....sis. The said plea of assessee stand accepted by Commissioner (Appeals) and hence the present appeal by the Revenue. 7. For better appreciation of the reasoning adopted by Commissioner (Appeals), we would like to reproduce the relevant paragraph from the impugned order:-  "From the plain reading of Su-section (a) of Section 9 above, it is clear that any operation or transaction, conducted by the IFC, has been provided immunity from taxation. This Act was enacted vide Act No.42/1958 dated 17.10.1958 by the Government of India and is still in force. The Adjudicating Authority in the impugned Order-in-Original has discussed this contention of the appellant and held that since in the instant case, the liability to pay tax is not on IFC b....

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....he service provider for collection & payment of service tax in the normal circumstances the same will apply on the service recipient in „reverse charge mechanism‟ when he will pay the service tax on behalf of the service provider. The benefits and privileges available to the service provider will also be available to the service receiver, when he is made person liable to pay service tax due to deeming fiction, under „reverse charge basis‟. As such I am of the view that the demand of service tax of Rs. 24,14,466/- (Including Cess), leviable on the upfront fees paid to IFC, Washington, under reverse charge basis, is not sustainable and is liable to be set-aside." 8. As against the above reasoning, Revenue has not disp....