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2014 (6) TMI 422 - AT - Service TaxDemand of service tax - Business Auxiliary Service - Held that - Board s Circular dated 26-9-2011 was not considered by the learned Commissioner while passing the impugned order dated 7-10-2011. We have also not found any findings on the aforesaid plea of the assessee regarding certain transactions with foreign companies for the period after April, 2006. In these circumstances, the question whether the appellant is liable to pay Service Tax with education cesses on the amounts paid by them to the foreign companies from 18-4-2006; and other issues associated therewith, need to be remanded to the adjudicating authority for de novo decision. As regards the demand raised for the period prior to 18-4-2006, the issue stands settled in favour of the appellant by numerous decisions including the Hon ble Bombay High Court s judgment in Indian National Ship Owners Association case (2008 (12) TMI 41 - BOMBAY HIGH COURT) which has been accepted by the C.B.E. & C. Accordingly, the demand confirmed by the adjudicating authority against the assessee for the period prior to 18-4-2006 is set aside and the corresponding penalties are vacated. For the period from 18-4-2006, the learned Commissioner is requested to readjudicate the issues in accordance with law and the principles of natural justice. It is made clear that all the contentions raised by the assessee shall be duly considered and appropriate findings recorded thereon - Decided in favour of assessee.
Issues involved:
Waiver and stay of adjudged dues including Service Tax and education cesses, penalty under Section 78 of the Finance Act, 1994 for the period from January 2005 to March 2007. Detailed Analysis: 1. Waiver and Stay of Adjudged Dues: The appellant sought waiver and stay of the adjudged dues, including Service Tax and education cesses, along with a penalty imposed under Section 78 of the Finance Act, 1994. The demand was related to Business Auxiliary Service (BAS) under the reverse charge mechanism. The appellant's argument that no Service Tax on BAS received from abroad was applicable before 18-4-2006 was not accepted initially. However, considering the judgment of the Bombay High Court and the subsequent acceptance by the C.B.E. & C., a prima facie case was found in favor of the appellant against a major part of the demand. After dispensing with pre-deposit, the appeal was dealt with due to the non-application of mind by the adjudicating authority to a crucial plea made by the appellant. 2. Crucial Aspects of the Impugned Adjudication: a. The appellant's plea based on the Bombay High Court's decision regarding the non-leviability of Service Tax on taxable services received from abroad before 18-4-2006 was not considered by the adjudicating authority, who relied on certain circulars of the Board. b. The appellant contended that some transactions with foreign companies post-April 2006 did not involve BAS import but were sale and purchase of iron ore pellets. The commission described in agreements was actually discounts to foreign buyers, not liable for Service Tax under BAS. The impugned order did not reflect consideration of this plea by the adjudicating authority. 3. Acknowledgment and Remand for Reconsideration: The Commissioner acknowledged the acceptance of the Bombay High Court's judgment by the C.B.E. & C. but no findings were recorded on the appellant's plea regarding transactions post-April 2006. The matter was remanded to the adjudicating authority for a fresh decision on liability for Service Tax with education cesses on payments to foreign companies post-April 2006, emphasizing reconsideration of all contentions raised by the appellant. 4. Decision and Set Aside of Prior Demands: For the period before 18-4-2006, the demand against the appellant was set aside, and penalties vacated based on settled issues in favor of the appellant by previous judgments. However, for the period post-April 2006, a readjudication was ordered by the Commissioner in line with legal requirements and principles of natural justice. 5. Final Verdict and Disposal: The appeal was allowed concerning the demand, recovery of interest, and penalties for the period before 18-4-2006. The matter was remanded to the adjudicating authority for fresh adjudication on similar issues post-April 2006. The stay petition was also disposed of accordingly.
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