AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 285
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....rtains to 'consulting engineer's service', Rs.24,38,975/- pertains to Business Auxiliary Services and Rs.4,23,586/- pertains to Commercial Training Service,Rs.25,793/- pertains to 'Erection, Commissioning or Installation Service' and Rs.59,289/- pertains to 'GTA Service'. 2.1. The demand in respect of 'Consultancy Engineer's Service' has been raised on the ground that the Appellant had paid technical consultancy service/licence fee to M/s. Thales Stuttgart, Germany, the Original Equipment Manufacturer (OEM) of M/s. Eldyne Electro Systems Pvt. Ltd., Kolkata (Appellant) for Digital Axle Counter (DAC) business, for the advice they receive for DAC business as and when the exigency arose. Thus, it was alleged that appellant was liable to pay service tax under the category of 'Consultancy Engineer's Service' on the charges paid to the foreign principal, on reverse charge basis, as they did not have any office in India. 2.2. The demand of Rs.24,38,975/- has been raised on the ground that the Appellant failed to charge service tax, as per the provisions of Section 66 of the said Act, for rendering taxable services viz. 'Business Auxiliary Services' in Indi....
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.... was paid subsequently in instalments; however, in the impugned order, the adjudicating authority has appropriated only Rs.3,05,00,000/-. Thus, they requested for the appropriation of the remaining amount of service tax paid. 5.2. The Appellant submitted that they have also paid Service Tax of Rs.25,793/- under the category of 'erection, commissioning or installation service' and service tax of Rs.59,289/- under the category of 'GTA Service' (transportation of goods by road) before issue of the Notice. However, they have not paid interest on such delayed payments made. The appellant submits that as they have paid entire service tax payable under the category before issue of the Notice, no interest or penalty payable by them. 5.3. Regarding the demand of Rs.24,38,975/- under the category of 'Business Auxiliary Services, the Appellant submitted that they have rendered service to M/s. Thales who are having their establishment outside India. In this regard, they contend that they are not liable to pay service tax as the services rendered by them namely, business auxiliary service, falls under Rule 3(1)(iii) of Export of Services Rules, 2005. As per the clarification issued by Boa....
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....pellant submitted that there is no mens rea on their part to evade the payment of Service Tax in the instant case; they were initially unaware of their liability and immediately upon being pointed out by the Department, they paid the Service Tax. Accordingly, the Appellant submits that there is no suppression of fact with intention to evade payment of tax existing in this case and thus, the penalty equal to the Service Tax imposed under Section 78 of the Finance Act, 1994 is liable to be set aside. They also submit that the penalties imposed under Section 77 of the Finance Act also not sustainable. 6. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. 6.1. He submitted that the Appellant had not paid appropriate Service Tax on their own, within the due date specified. Accordingly, he submitted that the Appellant is liable to pay interest under Section 75 of the Finance Act, 1994, for the delay in payment of service tax. He refers to the following table [ref. paragraph 2.6, page 13 of the Order-in-Original dated 18.03.2014] to contend that the payment of Rs.33,87,824/- was done much later and this payment was not verified : Date of Pay....
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....ss Auxiliary Services, we observe that the Appellant has rendered service to M/s. Thales, which is having its establishment outside India. We observe that the services rendered by them, namely, business auxiliary service, falls under Rule 3(1)(iii) of Export of Services Rules, 2005. As per the clarification issued by Board Circular 111/05/2009-ST dated 24.02.2009, the relevant factor that decides whether the service rendered is 'export of service' is the location of the service receiver and not the place of performance of the service. In this case, we observe that the training has been received abroad and hence the services rendered are received abroad. Thus, we find that the services rendered fall within the ambit of 'export of service' and accordingly, we hold that no service tax is payable by them on such services. 8.2. Regarding the demand of service tax of Rs.4,23,586/- under the category of 'Commercial Training or Coaching Services' we observe that the appellant has sent their personnel abroad for training and the expenditure in foreign currency was incurred for training their personnel abroad. Thus, we observe that the service was received by the app....
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.... is not liable to pay interest for the service tax paid by them for the extended period of limitation. 9.2. However, we hold that the Appellant is liable to pay interest under Section 75 of the Finance Act, 1994, for the delay in payment of service tax in respect of the normal period. We find that the Appellant have submitted, vide letter dated 13.11.2024, that they have paid interest amounting to Rs.21,32,542/- for the delay in payment of service tax for the normal period of limitation. They have enclosed copy of the e-Receipt Challan [bearing CTIN No. 2409692124] pertaining to the above payment in support of their claim. Accordingly, we appropriate the interest of Rs.21,32,542/- paid by them towards their interest liability. 10. Regarding, the imposition of penalty under Section 78 of the Act, we observe that initially the Appellant has not paid the Service Tax under reverse charge mechanism. However, when the liability was pointed out, the Appellant accepted their liability and discharged Service Tax thereof. Thus, we find that there is no suppression of facts with intent to evade payment of Service Tax existing in this case. In this regard, we refer to the decision of the Hon....