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TMI Blog2024 (12) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... m who was liable to pay service tax under reverse charge mechanism on the amount in dispute paid during the disputed period to UTS-USA. It is also the admitted fact on record that the Reliance Infocom has discharged the entire service tax liability on the disputed amount. The appellant / UTS-India is, admittedly, a subsidiary of UTS-USA hence cannot be considered as the distinct entity specifically when the service provider is the main company that UTS-USA. The observation are sufficient to hold that appellant is wrongly alleged to be the service provider. The service tax liability confirmed against the appellant is thereof liable to set aside. Extended period of limitation - HELD THAT:- The SCN was issued on wrong presumption. The impunged activity is held to be the Import of Service by Reliance Infocom as received from UTS-USA. Hence the demand has wrongly been confirmed against the appellant who is the subsidiary of UTSUSA, the service provider located in non taxable territory. Otherwise also the service tax stands already paid by the service recipient, Reliance Infocom Pvt. Ltd under reverse charge mechanism. This information was already provided to the department. The extended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 842/- was yet to be paid. The service tax is therefore alleged to be short paid. 1.3 During the audit itself, it was also observed that the appellant has shown, in their books of account, that the services valuing Rs.2,26,58,609/- were imported in India during the period from 12/2006 to 02/2007 but no service tax was paid by the appellant on the said amount despite that the said amount being reflected in ST-3 returns of UTS-India for the period October 2006 to March 2007. Thus the service tax amounting to Rs.27,64,350/- was alleged to be short paid. 1.4 Both the noticed short payments of service tax amounting to Rs.5,49,89,842/- and Rs.27,64,350/- were proposed to be recovered from the appellants along with the proportionate interest and the appropriate penalties vide Show Cause Notice (SCN) bearing No. 94/10/159 dated 16.04.2012. The said proposal has been partly confirmed vide the order in original as mentioned above. The demand of short paid service tax of Rs.5,49,89,842/- has been dropped. However, the short-paid service tax amounting to Rs.27,64,350/- has been confirmed along with interest and penalty of equal amount under section 78 of the Finance Act, 1994 has been imposed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was informed that appellant entered into contract with BSNL for supply of telecommunication equipment including software. 531 invoices were raised by the appellants on BSNL during the financial year 2008-09 for Provision of Taxable Service and the appellants had discharged its service tax liability on the same. But still the impunged Show Cause Notice was served upon the appellant demanding the service tax amounting to Rs.5,49,89,842/-. However, the reply to the said show cause notice dated 08.10.2015 has duly been considered by the adjudicating authority below and the order under challenge has dropped the demand of service tax of Rs.5,49,89,842/- along with the interest and penalty as was proposed in the show cause notice. Still the demand of Rs.27,64,350/- in respect of transaction between Reliance Infocom Ltd. and UTS-USA has wrongly been confirmed. The Commissioner has failed to consider the fact that the service tax already stands paid by Reliance Infocom Ltd under Reverse Charge Mechanism (RCM). The demand has wrongly been confirmed wrongly relying on the fact that the amount was shown in ST-3 return filed by the appellant. The said demand is therefore liable to be set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty by way of sale, gift or in any other manner A transaction merely in Money or Actionable Claim Any service provided by an employee to an employer in the course of employment Fees payable to a court or a tribunal set up under a law for the time being in force 7. Further we also need to know the meaning of consideration. Section 67 of Finance Act 1994, the explanation thereof defines consideration as follows: consideration includes- (i) any amount that is payable for the taxable services provided or to be provided; (ii) any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such conditions, as may be prescribed; (iii) any amount retained by the lottery distributor or selling agent from gross sale amount of lottery ticket in addition to the fee or commission, if any, or, as the case may be, the discount received, that is to say, the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such ticket. Thus consideration means everything received in return for a provision of service which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hereunder and this obligation shall survive termination or expiration of this Contract and / or any Work Orders. (iv) RELIANCE shall make all payments to CONTRACTOR after withholding the applicable amounts, if any, required under the Double Taxation Avoidance Agreement between India and USA, at the applicable rate prevailing at the time of payment under this Contract. RELIANCE shall provide CONTRACTOR with written notice of any change in the applicable withholding tax rate before deducting any withholding tax. RELIANCE shall provide to CONTRACTOR official tax receipts in respect of withholding tax paid in India within ninety (90) days of such payment for CONTRACTOR to claim any tax credits / double tax avoidance. In the event CONTRACTOR does not receive official tax receipts or other evidence within the said ninety (90) days, CONTRACTOR shall have the right to invoice RELIANCE for such withholding tax and RELIANCE agrees to pay such amounts upon receipt of invoice. UTS-USA also warranted that Support Services to Reliance Infocom shall be provided by them with due skill, diligence and care through adequate number of qualified personnel/technicians with suitable training, education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e service tax return for the period from 1.10.2006 to 31.3.2007 with the specific disclosure that the services treated by Reliance Infocom as import of the service and the tax deposited by the recipients / Reliance Infocom hence appellant is chargeable at nill rate . We also observe that the appellant vide letter dated 20.06.2007 had informed the department that : while we are disclosing the realization of invoices raised on the said customer (Reliance Infocom) in ST-3 return, we are not paying the service tax as it is being paid by the said customer. Even on the reply to audit memo dated 1.06.2010 the appellant clearly stated that the services have been treated by Reliance Infocom Ltd. As import of the services and they only have discharged the service tax liability. Despite this information with the department the impunged show cause notice has alleged that: UTS -ndia has shown in books of account that the services valuing Rs. 2,26,58,609 were imported in India during the period from 12/2006 to Feb 2007 no service tax was paid by UTS-India thereon treating the import of service as non-taxable under service tax rule, 1994 which was incorrect 13. It is clear that the show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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