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TMI Blog2015 (8) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... Technical),JJ. For the Appellant : Shri S S Gupta, CA For the Respondent : Shri Devendra Nagvenkar, Addl. Commissioner (AR) ORDER This appeal is directed against Order-in-Original No. 08/STC-I/BR/10-11 dt. 20.05.2010. 2. The relevant facts that arise for consideration are appellant are registered under the category of Mining of Mineral Oil or Gas service on which discharging the service tax liability. During an investigation conducted, it was noticed that in order to provide the services under the category of mining of mineral oil or gas service, the appellants were engaging the services of foreign parties not having permanent establishment in India. On conclusion of the investigation, Revenue entertained a view that the appellant is liable to pay service tax under reverse charge mechanism as provided under Section 66A of the Finance Act, 1994. Coming to such conclusion, a show cause notice dt. 23.9.2008 was issued for demanding service tax liability for the payment made by the appellant during period July 2007 to September 2007 to the foreign parties. The appellant contested the show cause notice on merits inter alia contesting the duty liability as also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation Vs. Union of India 2009 (14) STR 289(Bom.) which has been upheld by the Apex Court. He would draw our attention to Paragraphs 10,11,34,37, 38 of the said judgement in the case of Indian National Ship Owners Association. It is his further submission that the appellant has already paid the entire amount of the service tax liability as the service provided by the appellants were to ONGC and ONGC has paid the tax to him; it is the submission that the dispute today before the Tribunal is regarding the payment of interest on the said amount of tax as also penalties imposed. It is his submission that service tax liability itself does not arise, which is enough to set aside the interest and the penalties imposed. It is his submission that appellants had discharged entire amount of the service tax liability except for an amount of ₹ 4.92 lakhs approximately. It is his submission that the said amount is also paid by the appellant during hearing of the stay petition wherein the appellant was directed to deposit this amount. 3. Ld. DR on the other hand reads the contract entered by the appellant with ONGC and submits that the appellant is liable to discharge the service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated hereunder : (a) The Offshore Support Vessels carry out various types of jobs like, anchor handling, towing of vessel, supply to rig or platform, diving support, fire fighting and safety support in designated and non-designated areas. (b) The marine construction barge supports offshore construction, provides accommodation, crane support and stoppage area on main deck for equipment. (c) The harbour tugs are deployed for piloting big vessels in and out of the harbour and for husbanding main fleet. Their lordships have recorded entry of supply of tangible goods in para 18 which reads as under:- 18. In the meantime by the Finance Act, 2008 Entry (zzzzj) which we have quoted hereinabove was inserted into sub-section (105) of Section 65 of the Finance Act, 1994 to be effective from 16-5-08 to tax service in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliance. The 2nd respondent by Circular bearing No. M.F. (DR) Letter D.O.F. No. 334/1/2008 TRU dated 28-2-08 clarified the scope of this entry as covering inter alia, the supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offshore construction, provide accommodation, crane support and stoppage area on main deck or equipment. Their harbour tugs are deployed for piloting big vessels in and out of the harbour and for husbanding main fleet. They give vessels on time charter basis to oil and gas producers to carry out offshore exploration and production activities. The right of possession in and effective control of such machinery, equipment and appliances is not parted with. Therefore, those activities clearly fall in entry (zzzzj) and the services rendered by the members of the 1st petitioner have been specifically brought to the levy of Service Tax only upon the insertion of this new entry. 38. If the Department s contention is accepted that would mean that the activities of the members of the 1st petitioner are covered by entry (zzzy) and entry (zzzzj). Such a result is difficult to comprehend because entry (zzzzj) is not a specie of what is covered by entry (zzzy). Introduction of new entry and inclusion of certain services in that entry would presuppose that there was no earlier entry covering the said services. Therefore, prior to introduction of entry (zzzzj), the services rendered by the memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the appellant for hiring of rigs to ONGC by making payment to foreign entities is liable to be tax from 16.5.2008, to that extent we hold in favour of the appellant. 8. Be that as it may, from the records we find that the appellant has discharged entire service tax liability which was charged by them to ONGC. When the appellant has already paid the amount collected by them from ONGC to the Government, the question of any recovery of amount does not arise. 9. This takes to the question of interest and penalty imposed on the appellant. As we have already recorded hereinabove, the activities of the appellant in hiring the rigs from the foreign parties and enlisting the same to ONGC would not fall under the category of mining of mineral oil and gas service, is in itself enough to set aside the liability of interest and penalties imposed, in as much as that when there can be no service tax liability, the question of interest and penalty does not arise. We are of the view that the interest confirmed and penalty imposed on the appellant are unwarranted and needs to be set aside and we do so. 10. The appeal is disposed of as indicated hereinabove. (Pronounced in court) - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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