Idbi Bank vs Commissioner Of Central Excise & St ...
- CitationAPPEAL No.ST/531/11-Mum
Ratio decidendi
The rule this decision rests on
On the reverse-charge liability for services received from abroad, the Tribunal holds that service tax liability on the recipient arises only from 18.04.2006 by virtue of section 66A of the Finance Act 1994, and that the first appellate authority's finding to that effect is correct. Where the assessee has discharged the service tax liability together with interest before the show cause notice was issued, the penalties imposed on that count are set aside under section 80 of the Finance Act 1994, the Tribunal holding that the issue was contested before the various forums. On the question whether service tax is payable on amounts withheld as withholding tax on remittances to persons abroad, the Tribunal holds that the lower authorities, having relied only on a Board circular and characterised the withholding as TDS without recording any reasoning on the contested issue, have not decided it; the matter is therefore set aside and remanded to the adjudicating authority to decide that issue afresh after following the principles of natural justice, without expressing any opinion on its merits.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-In-Appeal No.TKG/01/LTU/MUM/2011 dated 17.06.2011 passed by Commissioner of Central Excise LTU, (Appeals), Mumbai)
For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. C.J. Mathew, Member (Technical)
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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== IDBI Bank Appellant Vs. Commissioner of Central Excise & ST (LTU), Mumbai Respondent
Appearance: Shri Keval Shah C.A. for Appellant Shri B. Kumar Iyer, Supdt.(AR), for Respondent
CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)
Date of Hearing : 02/09/2015 Date of Decision : 02/09/2015
ORDER NO
Per: M.V. Ravindran
This appeal is directed against of Order-In-Appeal No. TKG/01/LTU/MUM/2011 dated 17.06.2011.
2. The basic issue involved in this case is where appellant is liable to service tax liability on the payments made to service providers prior to 18-04-2006 as also post 18-04-2006 and whether service tax liability is to be discharged on the amount held back by the appellant as withholding tax for the remittances made the persons situated abroad.
3. Heard both sides and perused the records.
4. As regards the service tax liability on the appellant for the services received from the service provider abroad, we find that the first appellate authority has come to a conclusion that service tax liability arises on the appellant after 18.04.2006 by the virtue of provisions of section 66 A of the Finance Act 1994. The said findings of the first appellate authority is correct and does not require any interference. The impugned order to the extent it upholds service tax liability and the interest thereof, is correct and legal and does not suffer from any infirmity. This takes us to the penalties imposed on the appellant on this count. It is seen from the records that the appellant has discharged the entire service tax liability and the interest thereof before the issuance of show cause notice. The service tax liability having being discharged prior to issuance of show cause notice, we consider the same as it would fall under the provisions of section 73 (3) of the Finance Act 1994, show cause notice need not have been issued this point; be that is it may, since the issue involved was contested before the various forms, we invoke the provisions of section 80 of Finance Act 1994, set aside on the penalties imposed on this point as also wherever appellant has discharged the service tax liability and with the interest, before the issuance of show cause notice.
5. As regard the service tax liability under the category of withholding amount for taxes, the first appellate authority as well as the adjudicating authority have not recorded any reasoning for coming to conclusion that appellant is liable to discharge the service tax liability. Both the lower authorities has only relied upon the Board circular and holding that the withholding tax is an amount which needs to be considered as TDS.
6. Since the lower authorities have not addressed the issue as contested by the appellant, in our view, the issue needs reconsideration by the adjudicating authority. Accordingly, on this point without expressing any opinion on the merits of the case keeping all issues open we set aside the impugned order and remand the matter back to the adjudicating authority with a direction to reconsider only this issue of service tax liability on withholding tax and come to a conclusion after fallowing the principals of natural justice.
7. Accordingly, the appeal is disposed of as indicated herein above.
(Pronounced in Court)
(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)
akp 1 4 APPEAL No.ST/531/11-Mum
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