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TMI Blog2023 (6) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased the said goods on cash payment, without having duty paying documents. The present case depends upon the interpretation of law. The exigibility to tax will depend on determining the correct classification of the services. Hence the judgment is distinguished. One of the disputes between the department and appellant in this case relates to the classification of the taxable service related to the deputation of Foreign Service Engineers (FSE) by Mando Korea to their factory premises. Further the appellant states that neither the SCN nor the OIO has specified the category/classification under which tax on technical know-how fees are to be levied - Natural justice requires that the noticee knows the specific charge against him and the reason for it, on the basis of which a decision is proposed to be taken by the proper authority. Hon ble Supreme Court in the case of Commissioner of Central Excise Vs Brindavan Beverages Ltd [ 2007 (6) TMI 4 - SUPREME COURT ] has held that the SCN is the foundation on which the department has to build its case and if allegations in the notice are not specific, lack detail etc it would be sufficient to hold that the notice was not given prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MBER (JUDICIAL) AND SHRI M. AJIT KUMAR, MEMBER (TECHNICAL) Shri Raghavan Ramabhadran, Advocate for the Appellant Smt. K. Komathi, ADC (AR) for the Respondent ORDER This appeal is filed by M/s. Mando India Ltd. Sriperumbur. During investigation initiated by the Survey Intelligence and Research Wing of Service Tax Commissionerate, Chennai, it was noticed that the appellant had not paid service tax on the amount debited towards services received from their associated enterprise in the books of accounts on 10.5.2008. The various charges which are under dispute and the payment of service tax under reverse charge mechanism has been demanded are as under:- (a) Salaries paid to foreign service engineers (b) Fees for technical know-how (c) Fee for product testing / product validation (d) Reimbursement of air travel expenses (e) Service charges for loan guarantee As per the reply given by the appellant, the Commissioner of Service Tax vide Order in Original No. 48/2012 dated 29.2.2012 has confirmed the demand of Rs.2,63,60,667/- along with interest and penalties. Aggrieved by the impugned order, the appellant is before us. 2. No cross-objections have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment has failed to mention and classify the service it seeks to propose and demand service tax in the Show Cause Notice. Hence the Order in Original is beyond the scope of the Show Cause Notice and on this ground itself, the entire demand needs to be set aside. Further, since the issue involved is of pure interpretation of legal provisions and levy of service tax under reverse charge mechanism, as to whether payments made to foreign service engineers and Mando, Korea is liable for service tax. The extended period of limitation cannot be invoked. It is settled position in law that extended period of time or limitation cannot be invoked when the entire exercise is revenue neutral as the appellant could not have achieved any purpose to evade payment of service tax. Further, since the issue involves interpretation of law, penalty is not imposable. 6. The learned AR Smt. K. Komathi stated that service tax is leviable on the import of services after the insertion of Section 66A in the Finance Act, 1994 with effect from 18.4.2006. She stated that since reverse charge is applicable on all services when provided by a supplier who is based abroad, the non-mention of specific heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n sub-clauses of clause (105) of section 65. Natural justice requires that the noticee knows the specific charge against him and the reason for it, on the basis of which a decision is proposed to be taken by the proper authority. In this case with certain descriptive headings being equally applicable to one or more services, a noticee will not be able to put up an effective defense on the exigibility of the service rendered to tax, without knowing the exact classification heading of the service on which tax is sought to be levied. As held by a coordinate bench of this Tribunal in CCE, Pondicherry vs R Sundaramurthy Co [2019 (5) TMI 228-CESTAT Chennai], a SCN which does not specify the category of service under which it seeks to impose Service Tax is illegal and the Service Tax demand cannot be sustained. Further the Hon ble Supreme Court in the case of Commissioner of Central Excise Vs Brindavan Beverages Ltd [2007 (13) ELT 487 (SC)] has held that the SCN is the foundation on which the department has to build its case and if allegations in the notice are not specific, lack detail etc it would be sufficient to hold that the notice was not given proper opportunity to meet the alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Taxation of Services (provided from Outside India and Received in India) Rules, 2006. We note that the restriction provided in Rule 5 of the above rules is that the taxable service received from outside India shall not be treated as output services for availment of tax paid on any input services. However, there is no bar to utilizing of cenvat credit already availed to discharge service tax obligation on the import of services on reverse charge basis . This view is further supported by the fact that on 20 th June, 2012 the Cenvat Credit Rules, 2004 were amended so as to introduce an explanation which bars utilization of cenvat credit to meet oblilgation of tax on output service on reverse charge basis . (emphasis added) We find that the explanation to Rule 3(4)(e) of CENVAT Credit Rules, 2004, clarifying that CENVAT credit cannot be used for payment of tax when the person liable to pay tax is the recipient, was inserted by Notification No 28/2012 CE (NT) dated 20/06/2012, effective from 01/07/2012. The Explanation reads; Explanation. - CENVAT credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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