2018 (7) TMI 23

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..... he tax liability on 28.11.2007. Extended period of limitation cannot be invoked - appeal allowed on the ground of limitation.
Hon'ble Ms. Sulekha Beevi C.S., Member ( Judicial ) And Hon'ble Shri Madhu Mohan Damodhar, Member ( Technical ) Shri J. Shankarraman, Advocate For the Appellant Shri B. Balamurugan, AC ( AR ) For the Respondent ORDER Per Bench The facts of the case are that appellants are engaged in manufacture of textile products. They had obtained commercial loans referred to as ‚External Commercial Borrowings (ECB). From the investigations conducted by the department, it emerged that appellants had effected payments of US$ 135000 towards processing charges / upfront fee to certain banks for facilitating ECB of US$ 9 .....

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..... vice from foreign service provider when such service provider does not have office in India. However, the ICICI Bank Bahrain very much had an Indian office at Coimbatore which only handled application and documents in connection with the loan. iii) Demand at best can be fastened on ICICI Bank, Coimbatore and not on the appellant. iv) In any case, the entire proceedings are hit by limitation. The SCN has alleged suppression without any basis or evidence. v) Further the issue of liability to pay service tax under reverse charge mechanism prior to introduction of Section 66A of the Act was under much doubt and confusion and there were several judgments holding in favour of assessee as well as Revenue. The said confusion was set to rest o .....

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..... on hand, we find that the dispute has emanated from the upfront / processing fees of US$ 135000 equivalent to ₹ 59,83,200/- paid by appellant on 26.12.2006. It is also seen that since the proceedings are resultant of the DGCEI investigations and in particular, the letter dt.11.6.2007 to the appellant which was replied to by the latter on 20.06.2007 itself. We also note that the disputed tax liability was paid up during the course of investigation, on 14.09.2007. However, the SCN was issued only on 12.05.2008. During this very period, the issue of taxability on such payment made to foreign service provider was mired in litigation. As correctly pointed out by the Ld. Advocate, this confusion was finally sorted out only after the judgmen .....

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