9911796707
TMI Blog2012 (11) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... loans' from various overseas Banks for the purpose of international acquisitions and capital expansions. In order to procure a lender/lender syndicate, the appellant appointed various Banks abroad as Mandated Lead Arrangers (MLAs) and paid arrangement fee, which is the fee paid to procure lender/lender syndicate. The department was of the view that the appellant was liable to pay Service Tax on the fees paid to the MLAs and accordingly issued notice for recovery of Service Tax amounting to Rs.8,05,24,006/- along with interest during the period 1.10.2005 to 31.1.2007 under the category of Banking and Financial Services under the reverse charge mechanism as provided for vide Section 66A of the Finance Act, 1994. The notice was adjudicated vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vade and avoid any tax and it was the appellant's bona fide belief that they are not liable to Service Tax in respect of the fees paid to the MLAs. The period of demand is from October, 2005 to March, 2007, whereas the show-cause notice has been issued only on 23.7.2009 and hence, the demand is time barred. In view of the above, learned Counsel for the appellants pleads that stay be granted. 4. The learned Commissioner (A.R.) appearing for the Revenue, on the other hand, strongly opposes the contentions of the appellant. He submits that even though the show-cause notice does not specify the clause under which the activity would come under the Banking and Financial Services, in para 4.3 of the show-cause notice, it has been clearly stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that Service Tax under Section 66A can be demanded only w.e.f. 18.4.2006 and the said decision was upheld by the Hon'ble Apex Court also. Therefore, for the period prior to 18.4.2006, the provisions of Section 66A will have not any application and out of demand of Rs, 8,05,24,006/-, an amount of Rs. 2,79,08,777/- pertains to the period prior to 18.4.2006 and this demand is obviously not sustainable. As regard the demand on or after 18.4.2006, it amount to approximately Rs. 5.21 crores. 5.1 As regards the contention of the appellant that they were not put on notice, inasmuch as the show-cause did not specify the specific clause under the 'Banking and Financial Services' under which the activity undertaken by them would be leviable of Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Services'. The Hon'ble Apex Court in the case of J.K. Steel Ltd. Vs. UOI - 1969 (2) SCR 418 had held that: "If the exercise of a power can be traced to a legitimate source, the fact that the same was purported to have been exercised under a different power does not vitiate the exercise of power in question." Applying this ratio to the facts of the present case, we are prima facie of the view that show-cause notice clearly spells out the rationale for classification of the service under 'Banking and Financial Services'. 5.2 As regards the contention that the arrangement of services is only intermediary services and is different from lending, we find that out of the 16 lenders who provided the syndicated loan, 10 lende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and voluntary compliance. 5.5 The appellant has not pleaded any financial hardship. Therefore, as held by the Hon'ble High Court of Andhra Pradesh in the case of SQL Star International Ltd. - 2012 (25) STR 113(AP), the balance of convenience lies in favour of revenue. 6. In view of the foregoing, we are of the considered view that the appellant had not made out a prima facie case for complete waiver of pre-deposit of the dues adjudged against them. Accordingly, we direct the appellant to make a pre-deposit of Rs. 1 crore (rupees one crore only) towards dues adjudged within a period of eight weeks and report compliance on 13.12.2012. On such compliance, pre-deposit of balance of dues adjudged shall stand waived and recovery thereof stayed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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