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TMI Blog2019 (5) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning of the agreement to be a Consultancy Agreement. The issue would be more clear from the Consulancy Agreement entered into between the appellants and M/s. Vedanta. In clause (c) of the preamble of the Consultancy Agreement, it is stated that M/s. Vedanta is willing to provide Strategic Planning and Consultancy Services to appellant and each of its subsidiaries and for such Consultancy Agreement, the fees are fixed US$ 30 lakhs. The appellants have discharged service tax on the amount paid under this agreement. Thus, on analysis of both agreements, we have no hesitation to conclude that the agreement under question is nothing but a Representative Office Agreement and not a Consultancy Management Agreement. The demand of service tax on the amount of US$ 20 lakhs, which was paid by the appellant to M/s. Vedanta as Representative Office cannot be subject to levy of service tax under the category of Management Consultancy Services. The demand therefore cannot sustain on merits. Time Limitation - Revenue Neutrality - HELD THAT:- The service tax, in the present case, is discharged under reverse charge mechanism. In case, the appellants pay the service tax, they would be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and commercial materials to appellant to enable the appellants to promote/raise funds overseas. Thus department was of the view that though the amount of US$ 20 lakhs is shown as Representation Fees, it is actually Management Consultancy Fees and, therefore, the appellants are liable to pay service tax on this portion also under Management Consultancy Services. 2. After due process of law, the original authority held that the appellants are liable to pay service tax on US$ 20 lakhs under the category of Management Consultancy Services by reverse charge mechanism. The demand was confirmed with interest and also penalties under section 76, 77 and equal penalty under section 78 of the Finance Act, 1994 was imposed. An amount of ₹ 4,34,45,270/- already paid by the appellants were ordered to be appropriated. Hence this appeal. 3. On behalf of the appellant, the learned counsel Shri Vishal Agarwal appeared and argued the matter. He submitted that the appellant entered into a Representation Fee Agreement with M/s. Vedanta, a Body Corporate incorporated in England Wales on 29.03.2005. The said agreement records that the appellant is a leading non-f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding any service, either directly or indirectly, in connection with the management of any organisation or business in any manner and includes any person, who renders any advice, consultancy or technical assistance, in relation to financial management, human resources management, marketing management, production management, logistics management, procurement and management of information technology resources or other similar areas of management. 3.6 It is clear from the aforesaid definition that only services in connection with the management of an organization or business by way of advice, consultancy or technical assistance, in relation to financial management, marketing management, production management etc., alone are taxable. In the case in hand, M/s.Vedanta Resources Plc. was the appellant s agent in the U.K., representing on its behalf before bankers, lawyers, consultants and revenue and other authorities. 3.7 Time and again, CESTAT has held that such services of an executionary nature do not fall within the ambit of Management Consultancy Services, which covers rendition of advice, consultancy or technical assistance. The appellant placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Jay Yushin Ltd. Vs. CCE - 2000 (119) ELT 718 (Tri-LB). M/s. Reliance Industries Ltd. Vs. CCE - 2016 (44) STR 82 (Tri-Mum). 3.11 Without prejudice to the above, it is agreed that there is no reason or basis which had been assigned in the show-cause notice for seeking to invoke proviso to Section 73(1) i.e., larger period of limitation. The records of appellant-Company had been consistently audited by the department. However, no objection whatsoever in this regard was raised in the course of such audits. Accordingly, no suppression can be alleged on part of the appellant so as to invoke the extended period. 3.12 That the impugned order is liable to be quashed and set aside in its entirety. 4. Against this, the learned Authorised Representative Shri B. Balamurugan supported the findings in the impugned order. He adverted to the Representative Office Agreement entered between the appellant and M/s. Vedanta. In clause 1 of the agreement, the duties of Representative Office are stated. In clause 1.1, it is stated that M/s. Vedanta will provide technical and commercial materials to appellants to enable the latt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations, augment its financial resources and represent it before consultants and legal authorities. M/s. Vdeanta has indicated that it would be willing to act as a representative for M/s. Sterlite Industries Ltd. The parties have agree that M/s. Vedanta shall render such services to M/s. Sterlite Industries Ltd., on the terms and conditions hereinafter mentioned. 7. Clause 2 of the agreement mentions about the fees that has to be paid by appellant to M/s. Vdeanta. The fees is the consideration for performing its duties as a Representative Office. The fees is fixed as US$20 lakhs. Thus, from the agreement, it is very much clear that the intention of the parties is that appellants is to have Representative Office overseas. The department cannot pick and choose sentences from the agreement to interpret the meaning of the agreement to be a Consultancy Agreement. Even in clause 1.1, it is not stated that M/s. Vedanta is to provide technical or commercial advice to the appellants. Instead it is stated that M/s. Vedanta has to provide technical and commercial materials. This is because the Representative Office is under duty to provide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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