2024 (6) TMI 189

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....II, Kolkata, wherein the Ld. Commissioner has confirmed the demand of service tax of Rs.94,20,145/- along with interest and imposed equal amount of tax as penalty. He also disallowed Cenvat credit amounting to Rs.3,05,60,728/- and ordered of recovery of interest and penalty equal to the credit disallowed. Penalty has also been imposed on Section 77 of the Finance Act, 1994 and Rule 7(c) of the Service Tax Rules, 1944. 2. The appellant M/s. R.S. Software (India) Ltd. is engaged in development of software at its development centre in Kolkata. The appellant is registered with Service Tax Commissionerate, Kolkata - II, under the category of Management Maintenance or Repair Service and Business Auxiliary Service. For running their business, the....

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....ed along with interest and penalty. Aggrieved against the confirmation of the demands, the appellant has filed this appeal. 3. The appellant submits that they are rendering services through a network of branch offices located abroad. These branch offices are permanent establishments and not mere representative offices. They provide services to their clients in their own rights, raise invoices, incur expenditure, avail bank facilities, have its own technical and human resources and operate as independent units. They do not claim any reimbursement of expenditure from the Corporate Office. Section 66A(2) of the Finance Act, 1994 clearly lays down that permanent establishments in different countries shall be treated as separate persons. Theref....

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....ection 66A (2) of the Finance Act, 1994 clearly lays down that permanent establishments in different countries shall be treated as separate persons. For the sake of ready reference the said provision is reproduced below: Section 66A (2) Where a person is carrying on a business through a permanent establishment in India and through another permanent establishment in a country other than India, such permanent establishments shall be treated as separate persons for the purposes of this section. Explanation 1.-A person carrying on a business through a branch or agency in any country shall be treated as having a business establishment in that country. Explanation 2.-Usual place of residence, in relation to a body corporate, means the ....

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....er Section 77 of the Finance Act, 1994 and Rule 7(c) of the Service Tax Rules, 1944. 7. Regarding, disallowance of Cenvat Credit, we observe that the appellant produced photo copies of the invoices before the adjudicating authority at the time of personal hearing. However, the adjudicating authority rejected those invoices on the ground that they were not authenticated and the invoices were not legible. The appellant now submits that they have the original copies of all the invoices and they can submit the same before the concerned authorities for verification. For the purpose of verification, the matter needs to be remanded back to the adjudicating authority. Accordingly, we set aside the demand of Cenvat credit disallowed along with inte....