Rm Education Solutions Pvt Ltd vs Commissioner Of Central Excise, ...

[Arising out of Order-In-Appeal No 294-2014 dated 11/04/2014 passed by Commisioner Of Central Excise,Customs and Service Tax , COCHIN( Appeal) ]

For approval and signature:

HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

RM Education Solutions Pvt Ltd B-5,gayathri Building,technopark Campus THIRUVANANTHAPURAM - 695581 KERALA Appellant(s)

Versus

Commissioner of Central Excise, Customs and Service Tax Cochin-cce C R BUILDING, I S PRESS ROAD, ERNAKULAM, COCHIN, - 682018 KERALA Respondent(s)

Appearance:

Shri Harish Bindumadhavan, Advocate DELOITTE TOUCHE TOHMATSU INDIA PVT LTD CHARATERED ACCOUNTANTS,DEOLITTE CENTRE ANCHOARGE II 100/2 RICHMOND ROAD, BANGALORE - 560025 KARNATAKA For the Appellant

Shri S. Teli, Deputy Commissioner(AR) For the Respondent

Date of Hearing: 07/01/2015

Date of Decision: 07/01/2015

CORAM:

HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 20057 / 2015

Per : B.S.V. MURTHY

After hearing both the sides, we found that the issue is squarely covered by several decisions relied upon by the appellants and no longer res integra and also does not require any detailed consideration. Therefore, we waive the requirement of predeposit and take up the appeal itself.

2. Service tax demand for Rs.19,35,415/- with interest has been confirmed for the period from 19/04/2006 to 30/09/2008 and penalties have been imposed under various sections of Finance Act, 1994.

3. The learned counsel on behalf of the appellants submitted that the allegations in the show-cause notice as briefly explained by the learned counsel for the appellant are under:-

a. Assessee has received 'Leased circuit service' from a foreign based service provider namely, M/s.ETT City Hopper, London, who has further entered into a contract with Research Machines Plc, London, the principal Company of the assessee. M/s. ETT City Hopper, London being a license holder under the proviso to Sub-Section (1) of Section 4 of the Indian Telegraph Act, 1885 for establishing a dedicated leased line between the assessee and RM Plc, London, is a provider of taxable 'Telecommunication Service' and is the person liable to pay service tax. Since they do not have their office in India, naturally the liability to pay Service Tax falls on the recipient of services as per Section 66 of the Finance Act, 1994 read with Rule 2(1)(d)(iv) of Service Tax Rules, 1994. Service Tax amounting to Rs. 34,05,465/- is liable to be remitted.

b. The service provided by M/s. ETT City Hopper, London to the assessee falls under 'Leased Circuit Services', which became a taxable service w.e.f. 16.7.2001 as per the Notification no. 4/2001-ST dated 9.7.2001.

c. The assessee has not taken registration either under 'Leased Line Circuit' or 'Telecommunication Service' as per Section 69 of the Finance Act read with Rule 4 of Service Tax Rules, 1994 for discharging their Service Tax liability as per Section 68 read with Rule 6 of the said Act and Rules and have not filed ST3 returns as per Section 70 read with Rule 7 of the said Act and rules respectively.

d. The assessee has suppressed the fact of providing a taxable service from the Department. The assessee is not ready to follow the procedure by mis-interpreting the provisions of law with a deliberate intention to evade the payment of tax, thereby attracting proviso to Section 73(1) of the Finance Act, 1994 to invoke extended period of limitation.

4. He submits that the service provider is not a licensee under the Indian Telegraph Act and according to the definition of leased circuit service and telecommunications service, the service provider has to be a licensee under proviso to Section 4 of the Telegraph Act, 1885, in other words, has to be a Telegraph authority. In the appellants case, the service provider located outside India cannot be treated a telegraph authority as the service provider has no license as mandated under the Telegraph Act, 1885. He relies upon the decision in the case of Infosys Ltd. Vs. CST, Bangalore [2014-VIL-37-CESTAT-BLR-ST]. He also submits that the Departments own instruction F.No.137/21/2011-ST dt. 15/07/2011 clarify that the service provided by foreign vendors cannot be taxed under telecommunication service.

5. Since the issue is covered by the precedent decision mentioned above and also other decisions which were mentioned but we considered not necessary to reproduce, the impugned order cannot be sustained. Accordingly, the impugned order is set aside and appeal as well as stay petition are allowed with consequential relief, if any, to the appellant.

(Operative part of this order was pronounced in the court on conclusion of the hearing)

B.S.V.MURTHY TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER

Raja.

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