M/S Hotel Leelaventure Limited vs Commissioner Of Service Tax, Mumbai-I
- CitationAPPEAL No.ST/691/11-Mum
Ratio decidendi
The rule this decision rests on
The reverse-charge liability under section 66A of the Finance Act, 1994 cannot be imposed in respect of services rendered before 18.04.2006, the date from which that provision came into force, so a demand for the period March 2005 to September 2005 under that provision is not sustainable. Where the tax demanded was not payable in law, but the assessee had paid the tax and interest during the pendency of the proceedings, the penalties under sections 77 and 78 of the Finance Act, 1994 are set aside by invoking section 80 of that Act, which relieves the assessee of penalty where it has a reasonable cause for the failure.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Original No. 13/ST-II/WLH/2011 dated 26.09.2011 passed by Commissioner of Service Tax, Mumbai-II)
For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. C.J. Mathew, Member (Technical)
======================================================
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?
====================================================== M/s Hotel Leelaventure Limited Appellant Vs. Commissioner of Service Tax, Mumbai-I Respondent
Appearance: Shri Keval Shah. C.A. for Appellant Shri S.R. Nair,E.O. (AR), for Respondent
CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)
Date of Hearing : 16/09/2015 Date of Decision : 16/09/2015
ORDER NO
Per: M.V. Ravindran
This appeal is filed against Order-in-Original No. 13/ST-II/WLH/2011 dated 26.09.2011.
2. Heard both sides and perused the records.
3. The issue involved in this case is regarding the demand of service tax for the period March, 2005 to September, 2005 under the category of Banking and Other Financial Services as Merchant Banking Industry. It transpires from records that during the material period, appellant had arranged External Commercial Borrowing in form of Foreign Currency Convertible Bond and paid certain fees/charges to non-resident lenders for arrangement of Foreign Currency Convertible Bond. The tax liability has been confirmed under Reverse Charge Mechanism as per provisions of section 66A of the Finance Act, 1994. It is the case of appellant that they have discharged service tax liability and interest; praying to set aside penalties.
4. The appeal is for setting aside the penalties imposed by the adjudicating authority under section 77 and 78 of the Finance Act, 1994. We find from the records that appellant had already paid the entire amount of service tax liability during the pendency of proceedings before the lower authorities and as also paid the interest liability. The entire tax liability is incorrectly confirmed as the period involved is prior to 18.04.2006, on which date the provisions of section 66A came into the statute for demanding the service tax under reverse charge mechanism. Since in this case the tax liability is not payable, we find that the appellant had made out a strong case for invoking the provisions of section 80 of the Finance Act, 1994 for setting aside the penalties imposed.
5. Noting that the appellant had discharged the entire service tax liability and the interest thereof, though such tax was not payable, we set aside the penalties imposed by the adjudicating authority under section 77 and 78 of the Finance Act, 1994, by invoking the provisions of section 80 of the Finance Act, 1994.
6. The appeal is disposed of as indicated herein above.
(Operative portion of the order pronounced in court on completion of the hearing of case).
(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)
akp 1 3 APPEAL No.ST/691/11-Mum
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free