2023 (9) TMI 235

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....B) in terms of approval granted by Govt. of India/Reserve Bank of India in order to finance the capital expenditure required for modification and expansion of their plant. The Directorate General of Central Excise Intelligence (DGCEI), Kolkata Zonal Unit conducted investigation into the matter and came to notice that the appellant has obtained 04 numbers of External Commercial Borrowings from ICICI Bank Ltd., acting through its offshore Banking unit having its place of business at Plot No.8, Block-2, SEEPZ++, SEEPZ SEZ, Andheri (E), Mumbai, ICICI Bank, Singapore Branch, 9, Raffles Place, # 50-01 Republic Plaza, Singapore- 048619 and State Bank of India acting through its Bahrain offshore Banking unit, 9th Floor, Bahrain Towers, Government A....

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....nt submitted that they do not bear any dispute regarding taxability of service as 'Banking and Other Financial Services' but considering the change in Rule 2(1)(d)(iv) of Service Tax Rule, 1994 which is effective from 19th April 2006, the tax liability is on the recipient of the service from 19.04.2006. As such they have no dispute with regard to service tax liability on the services in respect of two ECBs obtained after 18.04.2006. They admitted their tax liability and paid the same. After investigation, a show cause notice was issued to the appellant to demand service tax for loan of US Doller two crores and thirty lakhs equivalent to amount of fees paid as Rs.1,00,57,900/- for which total tax liability arrived at Rs.55,32,010/-. The show....

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....order. 7. Heard the parties, considered the submissions. 8. We find that it is a fact on record that prior to 18.04.2006 the service tax was not payable by the appellant for the loan obtained by them from foreign bankers, who are not having their registered office in India under Reverse Charge Mechanism as held by the Hon'ble Bombay High Court in the case of Indian National Shipowners Association (supra), therefore, we hold that the tax liability of Rs.19,09,550/- was not sustainable against the appellant. Accordingly, the same is set aside. 9. With regard to legal charges, we find that the taxability on legal charges came into effect form 01.09.2009 and the said legal charges has been paid by the appellant prior to that. In that circums....