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TMI Blog2015 (9) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... re listed in the agreement entered into by the appellant with these entities and are described in the table below :- S. No. Activities Performed 1. Assist the company in obtaining work at acceptable rates; 2. Advise and assist the company on the commercial aspects of preparation of bids and subsequent contract negotiations; 3. Keep the Company advised on current developments in the territory which may affect its business and operations; 4. Upon request, advise the Company regarding securing Government licenses, permits and certificates as may be required with respect to its business and operations; 5. Upon request, advise the Company regarding obtaining visas and labour permits for entry into and departure from India of the Company's personnel in connection with any Work; 6. Advise the Company from time to time on the importation into and exportation out of India of all vessels, equipment, supplies, materials and consumables requested by the Company in connection with any Work; 7. Assist the Company on the importation and exportation of the drilling rigs in and out of India; 8. Advise the Company concerning commercial problems or issues which may from time to time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent economic and political developments in India. The Adjudicating Authority confirmed the demand alongwith interest and penalties invoking extended period holding that: (i) Service rendered to Transocean and Tidewater groups fell in the category of Management Consultancy Service, (ii) the appellants were guilty of wilful misstatement/suppression of facts with intent to evade service tax. 3. The appellants have contended as under :- (i) The term "Management Consultant" was defined in Section 65(65) of the Chapter V of the Finance Act, 1994 as under :- "Management Consultant" means any person who is engaged in providing any service either directly or indirectly, in connection with the management of any organization in any manner and includes any person who renders any advice, consultancy or technical assistance, relating to conceptualizing, devising, development, modification, rectification or upgradation of any working system of any organization." The "Taxable Service" is defined in Section 65(105)(r) of the Act as under :- "any service provided to a client, by management consultant in conne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bharti Televentures Ltd. v. Commissioner of Central Excise Delhi-I - 2013 (30) S.T.R. 148 (Tri. - Del.) (vi) So long as the consideration was received in convertible foreign currency, the service tax was exempt during the entire period by virtue of it being export of service. (vii) As regards a part of payment received by the appellants from ONGC in respect of service rendered to the foreign service providers (M/s. Tidewater and M/s. Transocean) the same is to be considered as payment received in convertible foreign currency because ONGC was required to pay a quantum of sum in foreign currency to the same foreign service providers who were to pay the appellants and the ONGC deducted an equivalent amount from the amount due to be paid by them to the foreign service providers and sent that amount to the appellants here in India. It is contended that it has been held by Hon'ble Supreme Court in the case of J.B. Boda and Co. Pvt. Ltd. v. CBDT - (1997) 223 ITR 271 (S.C.) and Indian Hume Pipe Co. Ltd. v. CBDT - (1987) 165 ITR 537 (Bom.) that such payment is to be regarded as payment received in foreign exchange. (viii) There is no wilful misstatement/suppression of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT Order Nos. 54492-54493, dated 24-11-2014 in that case, [i.e., Jubilant Enpro (P) Ltd.] [2015 (38) S.T.R. 625 (Tri.-Del.)]. 7. A careful perusal of the appellants services to M/s. Transocean and M/s. Tide Water detailed is para 2 above makes it clear that the appellants were advising the clients about various aspects relating to Management. The services are not executionery in nature and are clearly advisory in nature. The definition of "Management Consultant" is so worded that the services performed by the appellants clearly fall within its scope and for that one only has to read the definition of "Management Consultant" quoted earlier vis-à-vis the description of impugned services (detailed in para 2) to come to such finding. The expressions like "any service", "either directly or Indirectly", "inconnection with the management", "in any manner" appearing in the definition of 'Management Consultancy Service' are expressions which are expansionary rather than restrictive. Thus, this definition is wide enough to include advisory services rendered in connection with the management of an organization. The services rendered to M/s. Transocean and M/s. Tidewater as enumer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice, the same is not tenable because as per the definition of support service for business or commerce, the activities covered thereunder are essentially executionery in nature. Further the impugned service clearly fell under the scope of Management Consultancy service as analyzed earlier and therefore the conversion of Management Consultancy Service into Management or Business Consultancy Service would make no difference whatsoever about the appellants' liability. We are not eager to discuss this argument in greater detail simply because while interpretational support from later legislative developments is not to be spurned, such a support is unwarranted and unnecessary when there exists no ambiguity which is needed to be resolved. As has been discussed earlier, the impugned services rendered to Transocean/Tidewater categorically and unambiguously fall within the ambit of Management Consultancy Service. A perusal of the changes brought about in the definition when the "Management Consultant" was changed into "Management or Business Consultant" reveals that the impugned service to M/s. ONGC is not covered under "Management or Business Consultancy Service" any more than it was cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to. Thus, the impugned payments made by ONGC to the appellants do not merit to be treated as payments received in foreign exchange. 10. With regards the allegation of suppression of facts/willful misstatement, it is relevant to note that the appellants did not take registration, did not file any returns and also did not pay service tax due. They have merely stated in their defence that they had bona fide belief that they were not liable to pay the impugned service tax and cited several familiar decisions of Supreme Court essentially to the effect that mere negligence or failure on the part of the manufacturer does not attract extended period and something positive other than mere inaction or failure on the assessee's part or conscious withholding of information when the assessee knew otherwise is required for invoking extended period. They have however not given any basis as to how they developed/entertained such a belief. They are not some small time operators. There is not a word as to what reasonable steps they took to arrive at their claimed bona fide belief; whether they sought any legal advice or whether they consulted some professional/trade associations or ascert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alers Ludhiana - 2010-TIOL- 874-HC-P&H-S.T. = 2011 (24) S.T.R. 173 (P&H) has held that even if at the relevant time the penalties under Sections 76 & 78 were not mutually exclusive, once penalty under Section 78 has been imposed, penalty under Section 76 ibid may not be justified. We also have no difficulty in agreeing with the appellants that maximum penalty under Section 77 was only Rs. 1,000/-. 13. The appellants have questioned the issue of computation of impugned demand. We find that they took up this issue before the adjudicating authority also who also dealt with it. It has been clearly recorded in the Order-in-Original that they did not produce any documentary evidence to question the computation made by Revenue. They have not disputed this observation of the adjudicating authority. Therefore this plea at the appellate stage in the absence of any valid ground as to why they could not produce the documentary evidence before the adjudicating authority cannot be entertained. 14. It is seen that the adjudicating authority has imposed penalty of Rs. 1 Crore under 78 of Finance Act 1994 while the impugned demand is only Rs. 63,80,119/-. Needless to mention that penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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