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TMI Blog2012 (11) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... of Goods Transport Agency Service and Intellectual Property Right Service. During the course of audit conducted by the officers of CERA, it was noticed that the appellant had entered into an agreement for the Intellectual Property Right Services with M/s. Mainetti, UK Ltd., a company incorporated in United Kingdom for an exclusive right and license for the use of the technical information for the production of products within India and for the sale within the Territory and exports outside the territory. The appellant have agreed to pay to their foreign service provider an amount of royalty at the rate of 5% on the net wholesale value of all products produced and sold within the territory and @ 8% on the net wholesale value of products expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid on the total amount paid to the Service Provider abroad. (2) that there is no shortfall with reference to such payment of service tax and the inclusion of TDS amount does not vitiate the section governing valuation. (3) that the appellant had not explained to the Department that TDS had been paid etc. would only be the ludicrous suggestion for in terms of income tax statute, such TDS payments are a statutory must. To explain such a statutory provision once again and to further specify that the fact of such explanation not being given would render the appellant liable to the extended period of time for purposes of a demand would indeed be highly farfetched. (4) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce provider. I find force in the argument of the appellant that there is no question of suppression of facts as the amount involved is paid to a Government Department and payment of TDS is a statutory must. I find that there is no suppression of facts with an intention to evade payment of tax as the appellant were paying service tax on royalty payments and was also paying Income tax directly to the Government of India. Hence, I hold that the proviso to extended period of time cannot be invoked in this case and the period of demand is partly hit by limitation of time. Thus the period of demand survives only for one year i.e prior to the date of issue of the show cause notice. 5.2 Coming to the second issue, it has to be decided whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the instant case as the service receiver is paying Service tax on reverse charge mechanism method, the appellant had explained this position with a clear example to drive home his point. The examples of the appellant are as follows :- Take for example where the total amount billed is Rs. 100/- and TDS is Rs. 5/. The question before the Tribunals as in such event was whether service tax is to be calculated on Rs. 100/- or Rs. 95/-. The Tribunals took the stand that the service tax should be paid on Rs. 100/- inclusive of TDS amount. In the instant case, gross amount billed in terms of the above example is Rs. 100/- and TDS of Rs. 5/- was paid by Service receiver directly to the Income Tax Department. The gross amount billed and paid to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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