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2024 (9) TMI 1598
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....the Finance Act,1994 read with Taxation of Services (Provided from outside India and received in India) Rules 2006. A Show Cause Notice was issued on 23.10.2013, by invoking the extended period provisions, for the period 2008-09 to 2011-12, demanding Service Tax amounting to Rs.1,84,64,342. The appellants made their submissions questioning the quantification and provided documentary evidence towards their defence and submitted that they are not required to pay the demanded amount. After due process, the Adjudicating authority dropped the demand to the extent of Rs.57,17,640 and confirmed the balance demand of Rs.1,27,46,702. Being aggrieved, the appellant is before the Tribunal. 2. The Director of the company, appearing on behalf of the appellant submits that the details of Show Cause Notice for year-wise the service-wise demands are as per the following tables : Year USD Rs. Rate of Tax S.Tax. E.Cess She Cess Total 2008-09 - - 12% - - - - 2009-10 2536385 113951297 10% 11395130 227903 11....
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....at it may be taken that the Revenue is not disputing the amount of the demand dropped. 5. The Service-wise / year-wise breakup of the confirmed demand is as per the following table : Details Database Usage Charges Reimbursement of Advertising & Marketing expenses Legal Charges Salary Excess expenditure wrongfully considered by the department and service tax there on which is not corroborating with finacial data of the appellant Total Year USD INR USD INR USD INR USD INR INR Total USD Total INR 2009- 10 2490000 111788550 35552 1647193 10833 488554 0 0 27000 2536385 113951297 2010- 11 0 0 58580 2718140 106801 5006424 44783 2078499 0 210164 9803063 Total 2490000 111788550 94132 4365333 117634 5494978 44783 2078499 27000 2746549 123754360 Ra....
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....e FICO as the Sundry Creditors in the Balance Sheet in the said FY. (Annexure 23 Pg no. 230 of the Appeal book ). List of Sundry Creditors for FY 2009-10 certified by Statutory Auditors is provided in Annexure 10 Pg No. 189 of the Appeal Book. c. During the F.Y. 2010-11 the appellant noticed fall of business due to recession in USA market. The appellant realised that the said agreement would not be beneficial to fetch more business in the USA market. The appellant immediately took up the matter with FICO and stopped taking any services from them and requested to give waiver for the invoices raised by them. The email to the FICO by the appellant in this regard is provided in Annexure 12 Pg No. 191 of the Appeal Book. d. Subsequently, FICO gave the waiver of entire invoices amount and issued the certificate that FICO had not received any payment from the appellant in regards to the aforesaid invoices raised by them during the FY 2009-10. The certificate of FICO is provided in Annexure 16 Pg No. 197 of the Appeal Book. e. The appellant also submitted the certificate issued by the Statutory Auditor; State Bank of India, MSE Br. Salt Lake, STPI A Govt. of Indi....
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....ppellant and the consultants to provide time to time legal consultancy. It is evident from the furnished agreements that the nature of consultancy was for legal purposes. Documents submitted to SBI SME Branch for remittance of legal consultancy fees abroad are provided in Annexure 27 Pg no.305 to 381. Furthermore, during F.Y. 2009- 10 and F.Y. 2010-11 the legal services were excluded from the ambit of the Finance Act. Hence, no service tax was payable on legal fees of Rs. 50,06,424/- (USD 1,06,801/-) paid during the F.Y. 2010-11. Hence, the confirmed demand of Rs. 5,65,983/- is required to be set aside on this count alone. Further, the Service Tax liability of Rs.50,321 has been considered for both 2009-10 and 2010-11. This amounts to demanding Service Tax twice for the same transaction. C. Salary - Demand : Rs.2,14,085 Regarding salary paid to an employee in the USA, the appellant has provided an agreement in Annexure 24 Pg no. 284 to 287 which was executed between the appellant and the employee. Documents submitted to SBI SME Branch for remittance of salary abroad are provided in Annexure 25 Pg no. 288 to 300. The appellant states that salary does not c....
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....evenue reiterates the findings of the Adjudicating authority and submits that though the appellants are registered under Service Tax provisions, they have not declared the details of the expenditure incurred on account of foreign exchange outflow on various services received from overseas parties. In terms of Section 66A, the appellants are required to pay the Service Tax on Reverse Charge basis. The Revenue has undertaken detailed verification of the P & L accounts and Balance Sheet to stumble upon the foreign exchange outflow and after this Show Cause Notice has been issued. The Adjudicating authority after noticing that some amount of foreign exchange for which provision was made in the Balance Sheet was not paid to the exporter of service, has dropped the demand thereon. Thus, the demand on the balance amount of demand is wholly justified. Accordingly, he prays that the appeal may be dismissed. 11. Heard both the sides. Perused the Appeal papers and the other documentary evidence placed along with the synopsis and arguments adduced by both the sides. 12. There is no dispute with the legal provision that in terms of Section 66A of the Finance Act 1994, the receiver of the ....
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....ount of USD 500000. [Page 199 of the Appeal book] (v) Letter from FICO dated 12.08.2014, waiving dues of USD 50000 [Page 200 of the Appeal book] (vi) Certificate from FICO [Page No.197 of the Appeal book],stating that they have waived off the following amounts Year USD waived off 2010-11 1867500 2013-14 122500 2014-15 500000 Total 2490000 (viii) Certificate of Foreign Exchange Outflow during the Financial Years 2009-10 to 2014-15 has been issued on 20.02.2016 by State Bank of India. This Certificate shows that the payments have been made to the tune of USD 35551.69 towards reimbursement expenses during 2009-10, during 2010-11 USD 5859.76 towards reimbursement expenses, USD 44782.59 towards Salary, USD 106801.54 towards Legal Consultancy fee has been paid. It also certifies that there were no transactions during the year 2011-12 to 2014-15. This Certificate effectively proves that while foreign exchange payments have been made towards Salary, Reimbursement of Expenses and Legal Expenses, no amount has been paid towards the Database Usage charges. This corroborates the appellant‟s....
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....rst time with effect from 1.7.2012. Though the Service Tax to be paid on Reverse Charge basis in respect of import of services was already been place with effect from 18.04.2006 in view of Section 66A, the service in question has to be first of all be taxable service per se so as to attract the provisions of Section 66A. In this case since Legal services were not under Service Tax bracket till 1.7.2012, Section 66A provisions cannot be directly applied to demand Service Tax payment. Therefore, we hold that the confirmed demand on account of Legal services amounting to Rs.5,65,983, is legally not sustainable and set aside the same. The appeal is allowed to this extent. 16. Turning the confirmed demand of Rs.2,14,085 being the Service Tax element towards the outflow of foreign exchange on account of Salary, as has been certified by State Bank of India, we find that this would not call of any Service Tax payment. Hence, we set aside the confirmed demand of Rs.2,14,085 and allow the appeal to this extent. 17. In respect of confirmed demand of Rs.4,49,629, the appellant claims that the foreign exchange outflow is on account of expenses incurred by the overseas parties and the same....
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....29 in respect of reimbursement is being set aside, on the ground that this was not part of (a) to (d) classification mentioned in the Show Cause Notice. We allow the Appeal to this extent. In respect of the small confirmed amount of Rs.2784, on the same ground that no specific classification has been brought in, we set aside the same and allow the appeal to this extent. 19. Turning to the issue of time bar raised by the appellant, we find that the appellant is registered with the Department 25.02.2009 under their earlier name [Part of the Brief facts in the SCN] and subsequently under the present name 29.07.2010 as can be observed from the ST 2 Certificate enclosed at page 143 of the Appeal Book. While the SCN is silent about as to when the investigation were taken up, we find from the Para 5 of the Reply to SCN filed by the appellant that the Range Supdt Service Tax Division II, sent his letter dated 17.06.2013 on 19.06.2013, requesting for submission of documents for detailed scrutiny of Service Tax for the FY 2008-09 to 2011-12. The appellants have filed these documents on 26.06.2013, without any delay. Moreover, as rightly submitted by the appellant, the Service Tax if requi....