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TMI Blog2024 (12) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... ul suppression. There must be some positive act from the side of assessee to find wilful suppression as per Section 11A of the Central Excise Act, 1994. Thus, the impugned order confirming demand beyond the normal period of limitation is unsustainable. Nonpayment of service tax of Rs. 1,01,6,502/- under 'sponsorship' services - HELD THAT:- The appellant produced sufficient evidence to prove that the consideration for demanding said amount under 'sponsorship; services has been arrived without considering the details of expenses as explained in ibid, paras. Since, the actual amount of sponsorship fee is only Rs. 2,15,55,828/- and considering the fact that the appellant had discharged their liability on the said amount on Reverse Charge basis, service tax of Rs. 1,01,6,502/- demanded as per the impugned order under 'Sponsorship' services is unsustainable. Demand of Rs. 13,30,558/- on inter company management/service expenses shared with parent company - HELD THAT:- The appellant produced the challan evidencing payment of service tax of Rs. 2,23,79,555/- on a consideration of Rs.21,66,08,189/- against various services on inter company management/service expenses sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication Authority on the above directions after extending reasonable opportunity for adducing evidence regarding the payment of service tax. Demand of Rs. 73,00,732/- on import of services availed from associate enterprises - HELD THAT:- There are strong force on the submission made by the appellant that the overall income is only attributed to trading activity and same cannot be considered as receipt of any commission. However, the details can be verified only after verifying the records produced by the appellant. Hence issue is remanded to adjudication authority for considering the documents /evidence relied by the appellant and to find out the demand for normal period, if any payable by the appellant. Non-payment of service tax of Rs.2,80,40,921/- on software license fee - HELD THAT:- As per the software license and maintenance/support agreement produced by the appellant, no conclusion can be made that the onus for payment of license fee both for new licenses as well as for maintenance and support is on M/s Levi Strauss Co., both in respect of company owned/operated stores as well as for franchises as held by Adjudication Authority. The issue can be settled only on careful consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax and interest. Thereafter, Adjudicating authority as per the impugned order confirmed the demand with interest and penalty. Aggrieved by the said order, present appeal is filed before the Tribunal. 2. When the appeal came up for hearing, the Learned Counsel for the Appellant submitted that the Appellant is an Indian Pvt., Ltd., Company engaged in marketing and distribution of 'Apparel and Garments' under various brands of Levi Strauss Co and operates through network of distributors and franchises. The Learned Counsel drew our attention to the table describing the various demands confirmed by the Adjudicating authority against the Appellant. Sl. No. Description Amount (Rs.) 1 Demand for Sponsorship Services availed 1,01,86,502 2 Short payment on intercompany services 13,30,558 3 Interest demand due to belated tax payment 20,371 4 Demand under Renting services 2,45,58,483 5 On import of Services availed from associated enterprises 73,00,732 6 Demand for Software license fee 28,04,092 TOTAL 4,61,80,367(tax) 20,371(int) 4,62,00,738 3. As regards the demand under the category of 'Sponsorship' fee, the Learned Counsel submitted that as per the impugned order, it is he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the service provider under forward charge basis and the vendors have duly discharged service tax as applicable. The Appellant being the service receiver has no liability to pay service tax under Reverse Charge Mechanism (RCM) in whatsoever manner. Event Management Fee 6.61,054 In the instant case the Appellant organizes certain events in relation with their business for which they receive services from event management companies. The liability to discharge service tax on such service is on the service provider under forward charge basis and the vendors have duly discharged service tax as applicable. The Appellant is receiving services from the event management companies and hence, as the onus of discharging service tax on such services is on the service provider under forward charge the Appellant being the service receiver are not liable to pay any service tax under reverse charge. Fashion Show fee 98,43,173 The same pertains to fee which is paid to participate in fashion show. The Appellant pays a sum of amount to the organizing committee to participate in Fashion show. In the instant category service provider is liable to pay service tax under forward charge basis. In the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... categories are not subject to payment on Reverse Charge Mechanism (RCM). The Learned Counsel also drew our attention to the invoices issued by the service provider in such cases and submitted that as evident from the invoices, service tax was charged by the service providers for availing such services, including the same under the category of 'sponsorship' service and demanding service tax under Reverse Charge Mechanism (RCM) basis from the Appellant amounts to double taxation and prima facie illegal and unsustainable. 6. Learned Counsel further submitted that it was only as per instruction given by the Adjudicating authority, Appellant had produced the Chartered Accountant (CA) certificate certifying the above said entry in the document and if the said certificate was not sufficient to consider the above submissions, the Respondent ought to have demanded further evidence rather than rejecting the same outright. The learned Counsel drew our attention to the decision of this Tribunal in this regard in the matter of M/s Titan Industries Vs. CC, Bangalore -2006 (194) E.L.T 38 (Tri. Bang), where this Tribunal has held that if the Adjudicating authority is not satisfied with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that in respect of software license and maintenance/support agreements, the parties to the contract are M/s Levi Strauss Co., and M/s Ray Marks Expert Business System Ltd. The onus on payment of license fee both for new licenses as well as for maintenance and support is on M/s Levi Strauss Co both in respect of company owned/operated stores as well as for franchises. The Learned Adjudication authority given a finding that there is no privity of contract between the franchises and M/s Ray Marks Expert Business System Ltd., and the assessee s attempt to pass as a mere collection agent for M/s Ray Marks Expert Business System Ltd., is not sustainable in law. The Learned Adjudication authority further observed that though the license fee has paid on their behalf by assessee, merely saying that the same is given to M/s Ray Marks Expert Business System Ltd., without any markup does not absolve them from the liability to pay tax. Since M/s. Ray Marks Expert Business System Ltd., has been licensed to M/s Levi Strauss and Co, the onus of discharge of service tax under reverse charge is on M/s Levi Strauss, who is the licensee. Thus, confirmed a tax liability of Rs.28,04,092/- on softwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en billing and collecting software license fee for maintenance of Raymark software from the franchise/clients. The learned counsel for the appellant also relied on the decision of this Tribunal in the matter of M/s Global Vision Cable TV Network vs CC, Cochin (2008 (9) STR 58 (Tri. Bang), wherein it is held that the appellant being an agent of this parent company, if collected dues on behalf of the parent company, appellant cannot be held responsible for payment of Service Tax. Thus, the finding of the Learned Adjudication authority that though the license fee has paid on their behalf by assessee, merely saying that the same is given to M/s Ray Marks Expert Business System Ltd., without any markup does not absolve them from the liability to pay tax , is unsustainable. 11. The learned Counsel further submitted that for the subsequent period after the period covered by the impugned order, Appellant had entered into a direct agreement with M/s Ray Marks Expert Business System Ltd., for receipt of ITSS services and with franchises for provision of ITSS services. Appellant has been duly discharging service tax under reverse charge mechanism in respect of such services received from M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that:- 3(vi) Short payment of Service Tax on Renting of Immovable Property : During the discussion while conducting the audit, it was revealed that the assessee has short paid service tax for Renting of Immovable Property Service as per the Supreme Court directions in Civil Appeal No.8390 of 2011. As per the Court's order the assessee had to deposit 50% of the total service tax liability in three equated instalments within six months, on or before 01/03/2012. As per the details provided by the assessee, their 50% service tax liability is quantified at Rs.1,22,79,239/-. During the course of audit, the assessee could produce two challans of Rs.41,00,483/- each dated 31.10.2011 and 28.12.2011 and the third challan of Rs.6,49,143/- dated 31.03.2012. But the assessee has failed to produce any challan for the payment of the remaining amount of Rs.34,29,130/-. Since the assessed has not fulfilled the Court's order, they are not eligible for the concession i.e. deposit of 50% of the service tax liability with the department. Hence the service tax liability which works out to be Rs. 2,45,58,483/- is demandable and recoverable in terms of Section 73 of the Finance Act, 1994 . 14. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Act, 1994. Similarly in the matter of M/s Padmini Products Ltd Vs. CCE (1989 (43) E.L.T 195 (SC), Hon ble Supreme Court held that in the absence of any proof of suppression of facts, the longer period of five year would not be applicable and the demand for the duty was sustainable only for normal period of 6 months prior to issue of SCN under Section 11A of the Central Excise and Salt Act, 1944. The Learned Counsel further submitted that the issue involved is legal interpretation and when there is a conflicting view of the various judicial forums on the said issue, extended period of limitation cannot be invoked. The Learned Counsel relied on following judgments/ decisions: - i. M/s Hero Moto Corp Ltd., Vs. CC (2014 (302) E.L.T 501 (Del) ii. M/s PP Products Ltd., Vs CC, Chennai (2019 (367) E.L.T 707 (Mad) iii. M/s Titan Industries Vs. CC, Bangalore (2006 (194) E.L.T 38 (Tri.Bang) iv. CCE Vs. M/s IFB Industries (2019 (5) TMI 1014-CESTAT MUMBAI) v. M/s Delta Power Solutions Vs. CCE ST (2021 (11) TMI 174-CESTAT NEW DELHI vi. CC Vs. M/s Spice Jet Ltd (2023 (79) GSTL 271 (Tri. Del) vii. M/s Aban Loyd Chiles Offshore Ltd., Vs. CC, Maharashtra (2006 (200) E.L.T 370 (S.C) viii. M/s Elp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details furnished by the Appellant, it is evident that major part of the expenses are spent for different services and without considering the nature of service and payment of service tax made by service provider, they was clubbed together to demand service tax under section 68(2) of Finance Act, 1994 by classifying the service as 'Sponsorship' services. The appellant produced sufficient evidence to prove that the consideration for demanding said amount under 'sponsorship; services has been arrived without considering the details of expenses as explained in ibid, paras. Since, the actual amount of sponsorship fee is only Rs. 2,15,55,828/- and considering the fact that the appellant had discharged their liability on the said amount on Reverse Charge basis, service tax of Rs. 1,01,6,502/- demanded as per the impugned order under 'Sponsorship' services is unsustainable. 19. As regards demand of Rs. 13,30,558/- on inter company management/service expenses shared with parent company, the appellant produced the challan evidencing payment of service tax of Rs. 2,23,79,555/- on a consideration of Rs.21,66,08,189/- against various services on inter company managemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Adjudication Authority to appreciate the facts in right perception. Once the amount is settled as per the order of the Hon ble Supreme Court, it is not proper to re-open the issue and confirm Service Tax of Rs. 2,45,58,483/-on the ground that there is no evidence produced by the appellant regarding payment of remaining amount of Rs.34,29,130/-. If there is failure on the part of appellant to produce sufficient evidence regarding payment of entire amount as directed by Hon ble Supreme Court, only the due amount can be confirmed with interest. If the issue is re-opened as done by the Adjudication Authority, the Adjudication Authority is bound to consider the ground raise by the appellant regarding liability to pay service tax as per the law settled by the appellate authorities and by considering the ground raised by the appellant whether the amount short paid by the appellant represents rent less charged by landlords, who were not liable to register under the service tax registration, since their turn over during the impugned period was below the threshold limit prescribed in this regard. The facts can be considered only by the adjudication Authority on the above directions after e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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