TaxTMI 
TaxTMI 
2023 (6) TMI 241
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....nking and Other Financial Services' on the fees paid to foreign banks for the External Commercial borrowings under the Reverse Charge mechanism. 2. Brief facts are that the appellants hold Service Tax Registration and are also manufacturers of Copper Anode, Sulphuric Acid and Phosphoric Acid. They were availing the credit of duty paid on inputs, service tax paid on input services and also duty paid on capital goods. They were providing taxable services under Construction Engineering Services, GTA service etc. During scrutiny of financial statements it was noticed by the audit team that the appellant had paid a sum of Rs.4,84,15,401/- during the year 2008-09 to foreign financial institutions towards External Commercial borrowings (ECB). T....
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....echanism as the service provider (bank) is a non-resident of India and does not have any permanent establishment in India. As these details were unearthed only by audit conducted by the department, the respondents have suppressed facts. Thus Show cause notice was issued invoking the extended period proposing to recover the service tax along with interest and for imposing penalties. After due process of law, the original authority dropped all the proceedings observing that service provider has fixed establishment in India and therefore the amounts are not taxable under reverse charge mechanism. Against such order, the department is now before the Tribunal. 5. Ld. A.R Ms. Sridevi Taritla appeared and argued for the department. It is submit....
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.... 2008-09 0 1 24.11.2008 3692886 Arrangement fees 0 0 3692886 456440 A - Total ST Payable 4196112 2009-2010 1 18.08.2009 1019831 Arrangement fees 2 31.03.2010 1833349 Provision 3 30.09.2009 6652855 Provision 9506035 979121 B - Total ST payable 979121 Grand Total ST payable (A+B) 5175233 6. It is argued by the Ld. A.R that the Commissioner ought not to have dropped the entire demand and should hav....
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....09 (i) 24.11.2008 36,92,886/- During 2008-09, a total of 36 invoices were issued by Bank of Baroda charging service tax on arrangement fee, and 35 invoices were produced. 2009-10 (i) 18.08.2009 10,19,831/- During 2009-10, ANZ Capital Ltd, Mumbai had raised total 3 invoices, of which 2 invoices were produced before the department. (ii) 31.03.2010 18,33,349/- Provision - journal entry in the books. Even Department in the SCN as well as in the appeal does not state it to be any fees but agrees that it is a provision created in the books. (iii) 30.09.2009 66,52,855/- ....
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....ly on the bona fide belief that the disputed amount is not subject to levy of service tax. The decision in the case of Vedanta Ltd. Vs CCE Tirunelveli - 2019 (28) G.S.T.L 258 (Tri.-Chennai) and Universal Dredging & Reclamation Corpn. Ltd. Vs CGST & CE Madurai - 2021 (44) G.S.T.L 401 (Tri.-Chennai) was relied. 10. Heard both sides. 11. From the facts narrated above, it is seen that department has demanded service tax under the category of "Banking & Other Financial Services" on the fees paid by the respondents to foreign banks and financial institutions on the ECB. In the show cause notice, it is alleged that such banks and financial institutions do not have an office or permanent establishment in India. The respondent has given detail....