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TMI Blog2024 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ction under the Act. The service tax on commission paid to the foreign commission agents is payable under reverse charge only from 18.04.2006 and not from 01.01.2005 - It is found that in this case the appellant has discharged the service tax for the period from 18.04.2006 to 27.12.2008 and also intimated the same to the Department to consider the intimation as intimation under Section 73(3) of the Finance Act, 1994. Further, in the facts and circumstances of the case, the invocation of the penal provisions under Section 77 78 of the Finance Act, 1994 is not tenable. The appeal filed by the appellant is sustainable - the demand for the period 01.01.2005 to 18.04.2006 is not sustainable and also the penalties imposed under Section 77 78 are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,12,891/- for the period from 18.04.2006 to 27.12.2008. 4. The appellants paid commission to the agents to the tune of Rs. 5,55,19,867/- and on which service tax amount works to Rs. 63,22,829/- for the period from 09.07.2004 to 27.12.2008. Consequently,a show cause notice dated 21.10.2009 was issued alleging that; the appellants had paid commission to the agents located in different countries for providing services as detailed in Para 2, supra. Hence the services come under the category of 'Business Auxiliary Services' as defined in Section 65(19) of the Act and liable to service tax w.e.f 09.07.2004; as per Rule 2(1)(d)(iv) of the Service Tax Rules, 1994, if the service provider is a non-resident or from outside India and do not have any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, after insertion of Section 66A of Finance Act, 1994, the appellants voluntarily paid service tax of Rs. 40,98,147/- along with interest of Rs. 5,12,891/- for the period from 18.04.2006 to 31.12.2008 and the same was informed to the Assistant Commissioner of Service Tax vide letter dated 29.12.2008 and requested that the intimation to be considered as intimation under Section 73(3) of the Finance Act, 1994 for having fully discharged the service tax liability along with interest and requested that no notice as contemplated under Section 73(1) may be issued and treat the matter as closed. 6. The appellant submitted the following before the original authority that; the impugned order is patently in error holding that the tax ability of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia become liable to service tax under Section 66A of Finance Act 1994 from 18.04.2006 under reverse charge. Therefore the demand of service tax for the period prior to 18.04.2006 is without authority of law; the show cause notice was issued on 21.10.2009 proposing service tax demand for the period 09.07.2004 to 27.12.2008 and the Commissioner confirmed the demand of service tax for the period 01.01.2005 to 31.12.2008; they have paid the service tax on 26.12.2008for the period 18.04.2006 to 27.12.2008 which was acknowledged and appropriated in the impugned order; the fact of payment of service tax for the period 18.04.2006 to 27.12.2008 along with interest was intimated to the Department with a request not to issue show-cause notice as prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is held as under: "2. We have carefully read the provisions of Sections 65, 66, 66A and 68, including the Notification issued under Section 68(2). In our view, the learned Tribunal has rightly found that at the time when the tax was paid, the liability could not be fastened on the recipient of the services as even vide Notification, the liability was ordered to be fastened only since 1-1-2005. Thus, we do not find any error, or substantial question of law involved. The appeal is, therefore, dismissed summarily." This was affirmed by the Hon'ble Supreme Court -2010 (20) S.T.R. J141 (S.C). 11. Heard both sides and perused the records. 12. The issue involved in this case is whether service tax is leviable under reverse charge for the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are in respectful agreement….." (iii) CST, Bangalore V SKF India Ltd. - 2010 (18) S.T.R. 388 (Kar.) 13. In view of the above decisions of the Hon'ble Apex Court and the Hon'ble High Court of Karnataka, we find that service tax on commission paid to the foreign commission agents is payable under reverse charge only from 18.04.2006 and not from 01.01.2005. We find in this case the appellant has discharged the service tax for the period from 18.04.2006 to 27.12.2008 and also intimated the same to the Department to consider the intimation as intimation under Section 73(3) of the Finance Act, 1994. Further, we find that in the facts and circumstances of the case, the invocation of the penal provisions under Section 77 & 78 of the Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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