Custom, Excise & Service Tax Tribunal
Global Wind Power Ltd vs Cgst & Central Excise Daman on 22 July, 2024
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench at Ahmedabad
REGIONAL BENCH-COURT NO. 3
SERVICE TAX Appeal No. 11781 of 2014- DB
(Arising out of OIO-VAP-EXCUS-000-COM-082-13-14 dated 30/01/2014 passed by
Commissioner of Central Excise, Customs and Service Tax-VAPI)
Global Wind Power Ltd ........Appellant
Survey No. 24/1, 26, 27, 28, 358/2/2, 359/1, Kheri,
Amboli Road,
Silvassa, U T of Dadra & Nagar Haveli
VERSUS
Commissioner of C.E. & S.T.-Vapi ......Respondent
4th Floor...Adharsh Dham Building, Opp. Town Police Station, Vapi-Daman Road, Vapi Vapi, Gujarat- 396191 WITH SERVICE TAX Appeal No. 11783 of 2014- DB (Arising out of OIO-VAP-EXCUS-000-COM-082-13-14 dated 30/01/2014 passed by Commissioner of Central Excise, Customs and Service Tax-VAPI) Mehul Lakhani ........Appellant Dgm Of M/s, Global Wind Power Ltd, Survey No. 24/1, 26,27, 28, 358/2/2, 359/1, Kheri, Amboli Road, Silvassa, U T Of Dadra & Nagar Haveli VERSUS Commissioner of C.E. & S.T.-Vapi ......Respondent 4th Floor...Adharsh Dham Building, Opp. Town Police Station, Vapi-Daman Road, Vapi Vapi, Gujarat- 396191 APPEARANCE:
Shri Jigar Shah & Amber Kumrawat, Advocate for the Appellant Shri A R Kanani, Superintendent (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. C L MAHAR Final Order No. 11596-11597/2024 DATE OF HEARING: 22.03.2024 DATE OF DECISION: 22.07.2024 RAMESH NAIR M/s. Global Wind Power Limited [Units I & II] is inter alia engaged in the manufacture of 'Wind Turbine Generators' and 'Parts of Wind Power Mills'. The Appellant is also engaged in providing various output services
2|Page ST/11781&11783/2014-DB such as 'maintenance or repair service', 'erection, commissioning and installation', 'renting of immovable property' etc on which the Appellant has been duly discharging service tax. The Appellant is also receiving various services from Foreign Service Providers which are as under:-
Services received from "Market Research Agency" located outside India-
The Appellant appointed overseas Market Research Company, M/s. Global Wind and Solar Technologies, Netherlands (GWSL) for undertaking Market Research of the products of the Appellant in the markets of Europe and US. As per the said agreement, GWSL evaluates the market conditions, conducts necessary market analysis, carries out research and study for the market of the products of the Appellant in Europe and the US. GWSL also carries out survey of prospective clients from various locations in Europe and the US and assist the Appellant for commercial activities with clients in Europe and the US. In lieu of the same, the Appellant pays to GWSL an amount of Euro 7500 on monthly basis as a consideration towards rendering the said services.
Technical Inspection and Certification services by Overseas Service Providers The Appellant also receives Technical Inspection and certification services from various overseas service providers for the purpose of certification of the Wind Turbine so that the same meet the specified standards. The final products that meet the standards of safety, quality and efficacy are granted a certificate conforming to the quality specifications which is a necessary before the goods can be used for the intended use. Such inspection and certification services are undertaken outside India.
IPR/ Royalty payments for Technical Know- How to the Overseas Service Provider The Appellant had entered into a "Technical Assistance Agreement" with M/s. Norwin A/s, a company of Denmark for supply of Technical
3|Page ST/11781&11783/2014-DB Data, Know- How and Patents relating to manufacture, selling, installing, repairing, modernizing of the Wind Turbine Generator. The Appellants are paying Royalty for utilizing above technical know- how and for the right to intangible property namely patents to Wind Turbine Generator.
Consulting Engineer services provided by Overseas Service provider The Appellant had also entered into an agreement with various overseas parties who had provided services in relation to supervision of erection, commissioning and installation services to the Appellant.
In view of above facts, summon proceedings were initiated against the Appellant. Accordingly, statement of Mr. Manoj Rathore, Vice President was recorded on 12.01.2011 under section 14 of Central Excise Act, 1994.
1.1 Though the Appellant is of the view that no service tax was payable but only to buy peace with the Department, the Appellant had paid the service tax along with interest of Rs. 36,06,893/- even before the issuance of show cause notice dated 11.09.2013 in respect of all the services under dispute except the services provided by foreign market research agency. A further inquiry was conducted against the Appellant during the course of which, the Appellant had provided the Department with all the relevant information and records.
1.2 The aforesaid enquiry culminated into the issuance of the Show Cause Notice dated 11.09.2013 wherein the Department proposed to recover service tax to the tune of Rs. 63,66,971/- along with the applicable interest and penalty for the period from F.Y. 2008-09 to 2011-12. The Department vide the aforesaid SCN also proposed to impose penalty on Mr. Mehul Lakhani, DGM (Finance) under Section 78A of the Finance Act, 1994.
The Department in the Show Cause Notice alleged that the services of 'Technical Inspection & Certification', 'Market Research Agency' 'Consulting Engineer' and 'IPR/Royal' received by the Appellant from various foreign service providers who are not having office in India and the Appellant has paid commercial consideration in lieu of such services. Therefore, it would be treated as if the recipient has himself provided such services in India and thus, the service recipient i.e. Appellant is liable to discharge service
4|Page ST/11781&11783/2014-DB tax in terms of Section 66A of the Finance Act, 1994 for the period from F.Y. 2008-09 to F.Y. 2011-12. In response to the above Show Cause Notice, the Appellant had furnished a detailed reply to the Department vide letter dated 15.10.2023 denying all the allegations levelled by the Department. However, without considering the submissions made by the Appellant, the Commissioner of Central Excise, Customs and Service Tax Vapi (hereinafter referred to as "the Ld. Commissioner") passed the Order-in-Original No. VAP-EXCUS-000-COM-082-13-14 dated 30.01.2014 (hereinafter referred to as "the Impugned Order") and confirmed the entire demand raised in the show cause notice along with the applicable interest and penalty. The Ld. Commissioner also confirmed the imposition of penalty on Mr. Mehul Lakhani, DGM (Finance) under Section 78A of the Finance Act, 1994.
1.3 Being aggrieved by the Impugned Order, the Appellant has preferred the present appeal on the detailed grounds as raised in the appeal memo.
2. Shri Jigar Shah Learned Counsel along with Shri Amber Kumrawat, Advocate appearing on behalf of the appellant filed a detailed submission as followed:-
A. The taxable event has occurred outside India thus, no service tax is liable to be discharged by the Appellant.
A.1. Section 64 of the Finance Act, 1994 states that service tax is applicable for services rendered in the territory of India, except the State of Jammu and Kashmir.
A.2. As service tax is presumed to apply to all types of persons, the focus would be only on the taxable event, i.e. provision/rendering of service. When the statute provides that the applies to service activities taking place within this taxable territory.
A.3. In other words, irrespective of the normal location of the service provider or the service receiver, the levy will be attracted where the prescribed service is rendered in India (except in Jammu & Kashmir), even if the service provider does not have an office in India.
5|Page ST/11781&11783/2014-DB Per contra if the service is rendered outside India, the provisions relating to levy of service tax are not attracted.
A.4. In the instant case, the demand of service tax is on the activity undertaken by the foreign entities outside India. The alleged taxable services have been provided/performed outside India and the said services have been used and consumed by the Appellant outside India. Hence, in terms of Section 64 of the Finance Act, 1994, no service tax is leviable on the Appellant.
A.5. In this regard, the Appellant submits that that the taxable event occurs when the actual rendition of services takes place. It is submitted that all the services are provided to the Appellant by the overseas service providers from their respective countries. Therefore, the Appellant submits that the actual rendition of services has taken place outside India. Hence, the Appellant is not required to discharge Service Tax on the services received from the overseas service providers.
A.6. To substantiate the above proposition, the Appellant places reliance on the following decisions, wherein it has been categorically held that taxable even, in so far as the service tax is concerned, is the rendition of service. In view of the ratio laid down in the following cases, it is seen that the deciding factor is not where the user of the services is located but where the operations connected with the rendering of these services are carried out.
• Vistar Construction (P) Ltd v. UOI, 2013 (2) TMI 52-Delhi High Court • CCE v. Schott Glass India Pvt. Ltd, 2009 (91) TMI 45- High Court of Gujarat A.7. In the instant case, admittedly, the alleged taxable services have been provided by the foreign entity outside India. The said service is received by the Appellant outside India. Service, being intangible in nature, cannot be stored, transported and consumed at a later point of time. Therefore, the Appellant submits that since, the services have been rendered outside India, the taxable event had occurred outside India and thus, in terms of Section 64, the services
6|Page ST/11781&11783/2014-DB have not been rendered within the taxable territory. Therefore, no service tax is leviable on the Appellant in the present case.
B. Introduction of Section 66A of the Finance Act, 1994 does not deviate from the above object that the services performed outside India would attract the levy of Service Tax.
B.1. The Explanation to Section 65(105) of the Finance Act, 1994 was deleted w.e.f. 18.04.2006 and on the same date Section 66A of the Act has come into force. For ease of reference, Section 66A of the Finance Act, 1994 is reproduced as under:
"66A. Charge of Service Tax on Services received from outside India (1) Where any service specified in clause (105) of section 65 is,-
(a) provided or to be provided by a person who has established a business or has a fixed establishment from which the service is provided or to be provided or has his permanent address or usual place of residence, in a country other than India, and
(b) received by a person (hereinafter referred to as the recipient) who has his place of business, fixed establishment, permanent address or usual place of residence, in India, such service shall, for the purposes of this section, be taxable service, and such taxable service shall be treated as if the recipient had himself provided the service in India, and accordingly all the provisions of this Chapter shall apply:
Provided that where the recipient of the service is an individual and such service received by him is otherwise than for the purpose of use in any business or commerce, the provisions of this sub-section shall not apply:
Provided further that where the provider of the service has his business establishment both in that country and elsewhere, the country, where the establishment of the provider of service directly concerned with the provision of service is located, shall be treated as the country from which the service is provided or to be provided.
7|Page ST/11781&11783/2014-DB (2) Where a person is carrying on a business through a permanent establishment in India and through another permanent establishment in a country other than India, such permanent establishments shall be treated as separate persons for the purposes of this section.
Explanation 1. - A person carrying on a business through a branch or agency in any country shall be treated as having a business establishment in that country.
Explanation 2.-Usual place of residence, in relation to a body corporate, means the place where it is incorporated or otherwise legally constituted."
B.2. Simultaneously, vide Notification No. 11/2006-ST dated 19.04.2006, the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 (hereinafter referred to as "the Import of Service Rules") have been introduced.
B.3. The Appellant submits that in the instant case, the taxable services, if any, provided by the service provider have been provided/performed in a place outside India and have been received by the Appellant outside India and hence, would not be taxable even under Section 66A of the Finance Act,1994. The Appellant state and submit that section 66A of the Act, does not in any way override the aforesaid object of the service tax law that service provided outside India would not be subject to service tax. As a matter of fact, the Appellant submits that section 66A of the Act, is in line with and does not in any way deviate from the said settled principle.
B.4. Section 66A of the Act seeks to tax those services which are provided by a Foreign Service provider from outside India and the said services are received by the Indian recipient in India. This fact is evident from a plain reading of section 66A of the Act. Furthermore, it is submitted that very nomenclature of the rules introduced along with section 66A suggests the same i.e. Import of Services Rules.
B.5. Moreover, Rule 3 of the Import of Services Rules clearly stipulates that taxable services provided from outside India and received in India shall, in relation to taxable services be the following
8|Page ST/11781&11783/2014-DB categories of taxable services. Rule 3(i) provides that specified services shall be treated as provided from outside India and received in India which is provided in relation to an immovable property situated in India. Rule 3(ii) provides that specified services shall be treated to Rule 3(ii) provides that if such service is partly performed in India, it shall be treated as performed in India. Rule 3(iii) provides specified services shall be treated as provided from outside India and received in India which is provided and is received by an Indian recipient for use in relation to business or commerce in India.
B.6. Hence, it becomes abundantly clear that services provided from outside India and received in India would alone be subject to service tax under section 66A of the Act. The appellants submit that even section 66A read with the Import of Services. Whereas, in the instant case, the services have been provided outside India; however, no services have been received in India. The Appellant submits that the mere fact that the service recipient is an Indian entity would not render the service, which is otherwise not subject to service tax, chargeable to service tax.
B.7. In support of the above submission, the Appellant wish to place reliance upon decision of the Hon'ble Delhi High Court in the case of Orient Crafts Limited V/s Union of India 2006 (4) STR 81 wherein the Hon'ble High Court had held that only those services that are provided outside India and received in India are liable to Service Tax. When no service is received in India, the question of levy of service tax does not arise.
B.8. The Appellant submit that the above analogy explained by the Hon'ble Delhi High Court applies in all force to the present case. In the instant case as well, the services were outside India. The said service is received and consumed by the Appellant at the said place itself. By no stretch of imagination, can it be suggested that the said service has been received in India. Therefore, the assumption in the Show Cause Notice and the order-in-original that merely because the service receiver i.e. the Appellant is located in India and the funds could be put to law. The impugned order is based on assumptions and presumptions.
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C. Section 64 and Section 66A co-exist in the statute book.
C.1. The Appellant submits that Section 64 of the Act provides that the Chapter extends to whole of India except the state of Jammu & Kashmir. Section 66A of the Act, as introduced with effect from 18.04.2006 provides that services provided from outside India and received in India shall be subject to service tax at the hands of the Indian recipient. Hence, it is clear that the service to be taxable in India has to pass the test of Section 64 of the Act and section 66A of the Act.
C.2. In other words, the Appellant submit that section 64 of the Act and section 66A of the Act co-exist in the statute book. One does not override the other. There is nothing in the language of section 66A to suggest that the provision of section 66A overrides the provision of section 64. As a matter of fact, the Appellant submit that it cannot be so for the reason that had that been the intent of the Legislature, the Legislature would have done away with section 64 after introduction of section 66A. This has not be done and in humble submission of the Appellant, rightly so. The provisions of section 64 and section 66A are in tandem with each other and in no manner run contrary to each other.
C.3. It is well settled that every clause the statute should be construed with reference to the context and other clauses of the Act, so as, as far as possible to make a consistent enactment of the whole of the stature. Words, phrases and rules occurring in a statute are to be read together and not in an isolated manner. The legislation never intends to give one from one hand and take away from other hand.
C.4. If the interpretation canvassed in the impugned order-in- original is to be accepted, it would lead to redundancy of section 64 of the Act, in as much as any taxable service provided recipient is an Indian entity. It is well settled that any interpretation that leads to redundancy of a specific provision of law needs to be avoided.
C.5. Therefore, on this ground alone, the Impugned Order is liable to be set aside.
10 | P a g e ST/11781&11783/2014-DB D. In the present case the services were performed outside India viz in Europe and US and therefore, the same do not satisfy the condition laid down in Rule 3(ii) of the Import of Service Rules.
D.1 It is submitted that the Ld. Commissioner has simply relied on section 66A of the Finance Act and has not given any finding on Rule 3(ii) of the Import of Service Rules at all, there is not even a whisper on the submission raised by the Appellant pertaining to non- applicability of Rule 3(ii).
D.2 The Ld. Commissioner in para 25 of the impugned Order takes an erroneous view that the Marketing services undertaken in Europe and US for the purpose of marketing and selling the product in Europe and US markets has no relevance for determining whether the said Marketing services are provided from outside of India or otherwise. The Ld. Commissioner commits an error in holding that since the Market research is in relation to the product, and the key criteria is the origin of the product for which the services are provided and further the Market Research Report is also received in India, the service is alleged to be provided in India.
D.3. It is submitted that the Ld. Commissioner has taken an incorrect view. That mere receipt of Market Research Report in India would not make the services performed in India. The rendition of services was done outside India and therefore, mere receipt of the Market Research Report would not mean that the services were partly performed in India. In this regard, the Appellant places reliance on the decision of BDM Pvt. Ltd Vs CCE, 2016 (12) TMI 1395- CESTAT, wherein the Hon'ble CESTAT in a similar situation where market research agency services were carried outside India of Market Research Report was received in India, held that the since, the rendition of service was outside India, no service tax would be leviable on the same.
D.4. Therefore, on this ground, it is submitted that the Impugned Order is liable to be set aside.
11 | P a g e ST/11781&11783/2014-DB E. Without prejudice, royalty paid to the foreign collaborator would not be liable to service tax under the category of 'Intellectual Property Right'.
E.1. The Appellant submits that technical information can be covered as an' Intellectual Property' as defined under Section 65 (55a) of the Finance Act, 1994 only if the same is either registered under the Patents Act, Industrial Designs or trademark Act. Further, the Appellant submits that the drawings, sketches and designs in issue are not registered under Designs Act, 2000 as well. This fact is also not in dispute. However, it is submitted that India recognizes patent, copyright, industrial design and trademark as intellectual property. The Appellant submits that only the aforesaid 4 intellectual property rights are recognized by Indian statutes.
E.2. The Appellant submits that know-how and confidential information is not recognized by 'Intellectual Property Right' Laws in India. Know- how is "undisclosed information" which is not recognized by any Indian Law. This has been so clarified by the department in clarification issued vide Circular 80/10/2004-ST dated 17.09.2004.
E.3. Further, the Appellant places reliance on the following decisions wherein it has been held that royalty for technical know- how is nit payment for any 'service' and therefore, no service tax is payable on them:
Yamaha Motors (I) P Ltd. v CCE, 2005 (186) ELT 161 (T) Samsung Electronics Co, Ltd. v. CCE, 2006(1)STR 217 (T) CCE v. Veleo Friction Material India (P) Ltd., 2006 (3) STR 588 (T) E.4. Therefore, royalty paid by the Appellant cannot be made liable to service tax under "Intellectual Property Right". No attempt has been made by the Ld. Commissioner to verify the nature of Royalty payments made to the overseas services providers. Hence, on this ground, demand is liable to be set aside.
12 | P a g e ST/11781&11783/2014-DB F. The services if any is provided in relation to export of products in India. The intention of Government is not to export taxes but only export goods. This is contrary to the intention of the legislature. This view is fortified by decision of this Hon'ble Bombay High Court in the case of Repro India Vs Union of India 2009 (235) ELT 614, Para 8 thereof. Hence, the service tax paid on input services must be allowed to the appellants. The appellants submit that if service tax paid on the input services are not allowed to the appellants, the said taxes would have to be built in the cost of the goods. Thus, it would lead to export of taxes which are against the policy of the Government.
G. The Show Cause Notice itself could not have been issued in the present case in terms of Section 73(3) of the Finance Act, 1994 since the entire amount of Service Tax was paid by the Appellant prior to the issuance of the Show Cause Notice.
H. The entire situation in the present case is revenue neutral. Therefore, on this ground alone, the Impugned Order is liable to set aside.
H.1. Without prejudice to the submissions made above, the Appellant submits that the entire situation in the present case is revenue neutral since, the Appellant would have been eligible to take Cenvat Credit of the service tax. Therefore, on this ground alone, the demand should be set aside.
H.2. The Appellant, in this regard places reliance on the decision of Emerson Process Management Pvt Ltd Vs CCE, 2024 (2) TMI 911-CESTAT wherein this Hon'ble Tribunal had held that services received by the appellant on which demand has been made on reverse charge basis are directly linkable to the output services provided by the appellant and thereby situation is revenue neutral and thus service tax cannot be demanded.
H.3 The above proposition has also been upheld in the following decisions:
• Nayara Energy Ltd v. CCE, 2023 (12) TMI 252-CESTAT 13 | P a g e ST/11781&11783/2014-DB • Jet Airways (I) Ltd v. CST, 2016 (44) STR 465 (T) [Affirmed by the Supreme Court of India at 2017 (7) GSTL J35 (SC)] H.4. Hence, on this ground itself, the Impugned Order is liable to be set aside.
I. Extended period of limitation is not invokable in the present case I.1 The Appellant submits that the SCN in the present case was issued on 11.09.2013 by invoking the extended period limitation, proposing to recover the Service Tax for the period of 2008-09 to 2011-12. The Department in the present SCN has alleged suppression and wilful mis-statement of facts on the part of the Appellant and demand has been accordingly been confirmed by the Ld. Commissioner in the Impugned Order.
I.2 However, in the present case Appellant submit that there was no suppression of any fact of wilful misstatement on its part as the Revenue Authorities have conducted the several audits from time to time wherein the details in respect of transportation income been observed and acknowledged by the audit officers, from time to time.
I.3. The Appellant places reliance on the decision of M/s GD Goenka Pvt. Ltd. v. Commisisioner of CGST, 2023 (8) TMI 995- CESTAT NEW DELHI wherein it was held that merely because the assessee is required to self- assess his tax liability and that the Department only came to know about the wrongful availment of Cenvat Credit only because it conducted audit does not imply that the Appellant had the intention to evade tax liability. The Hon'ble Tribunal held that the obligation of the assessee is to file his Returns and thereafter it is the duty of the Department to scrutinise such Returns and assess the tax liability. If the Department fails to do so then, the responsibility of the same lies with the Department and not the assessee. The responsibility of the assessee is limited to the filing of his Return and nothing more is required of him. Therefore, in such cases, the Department cannot allege suppression of facts and invoke the extended period of limitation.
14 | P a g e ST/11781&11783/2014-DB I.4 Further, this Hon'ble Tribunal in the case of Emerson (supra) has held that no suppression can be alleged in cases where the situation is revenue neutral. It is been submitted above that the situation in the present case is revenue neutral, therefore, no suppression can be alleged.
I.5. Therefore, it is submitted in light of the above decisions that the extended period of limitation cannot be invoked by the Department since, there is no suppression of facts present in the Appellant's case. Hence, on this ground alone, the entire demand is liable to be set aside.
3. Shri A R Kanani, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order.
4. On careful consideration of the submission made by both the sides and perusal of record, we find that though the appellant have made multiple/alternate submissions. However, we are of the view that the appeal can be disposed of on the ground limitation itself. The appellant have made the submission that the entire exercise of payment of service tax and availment of Cenvat credit thereof is amount to revenue neutral. Therefore, there is no purpose of suppressing any fact. Accordingly, the Proviso to Section 73(1) which is applicable for invoking the extended period is not applicable.
4.1 We find that appellant had a bona fide belief that since the services are provided outside India and received outside India the service being performed in non taxable territories the same is not taxable. We find force in the appellant's bona fide belief. Moreover, if at all, the service tax is payable the appellant would have been eligible to take Cenvat credit of service tax. Therefore, on this ground alone, the extended period cannot be invoked as due to revenue neutrality there cannot be any intention to evade payment of service tax. This view is supported by the Tribunal's decision in the case of Emerson Process Management Pvt. Ltd Vs. CCE, 2024 (2) TMI 911-CESTAT wherein Tribunal has passed the following order:-
15 | P a g e ST/11781&11783/2014-DB "4.2 Moreover, on the entire services they have been paying service tax while providing services to M/s Reliance Industries Ltd. It is also fact that whatever service tax was paid on the part of the activity i.e. project management and validation service, the appellant have availed the Cenvat credit and they are discharging the service tax in respect of overall services which includes all the activity of service received from abroad, while forwarding to M/s Reliance Industries Ltd. In this case, if at all there is any tax liability as claimed by the department the same is clearly available as Cenvat credit to the appellant. Therefore, the entire exercise is revenue neutral. In this position, no mala fide can be attributed to the appellant as there is no intent to evade payment of tax due to revenue neutrality of the case. In various judgments cited by the appellant which are cited below, the demand was set aside only on the ground of revenue neutrality:-
Jet Airways (I) Ltd 2016 (44) S.T.R. 465 (Tri. - Mumbai) Sarovar Hotels Pvt. Ltd 2018 (10) G.S.T.L. 72 (Tri. - Mumbai) Continental Foundation Jt. Venture 2007 (216) E.L.T. 177 (S.C.) Cosmic Dye Chemical Vs. Collector of Central Excise, Bombay 1995 (75) ELT 721 (SC).
CCE Vs. Chemphar Drug and Liniments 1989(40) ELT 276 (SC) Pushpam Pharmaceuticals company VS. CCE Bombay 1995 (78) ELT 401 (SC) Tamil Nadu Housing Board 2004 (74) ELT 9 (SC) Nirlon Ltd 2015 (320) E.L.T. 22 (S.C.) 4.3 In view of the above judgments, it is settled law that when there is a revenue neutrality in any demand no suppression of the fact can be attributed to the assessee. The present case is on much batter footing as the appellant has paid service tax on the part of the activity of the service received from abroad. Therefore, there was no suppression of fact on the part of the appellant. Moreover, the present case is clearly of revenue neutral. In the present case, the demand was raised for the period from March, 2006 to March, 2008 whereas the show cause notice was issued on 20.06.2011 i.e. much after the normal period. Accordingly, the entire demand falls under the extended period."
From the above decision, which has relied upon various judgments on the issue of Revenue neutrality, it has been held that the demand for the extended period is not sustainable. Therefore, in view of the above judgments, in the present case since, there is revenue neutrality in the entire exercise of service tax payable and the Cenvat credit available thereof to the appellant, the demand being under extended period will not be sustainable.
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5. Therefore, we set aside the demand of service tax. Consequently, the penalties imposed will also not sustain on the co-appellant. Accordingly, the impugned order is set aside. Appeals are allowed.
(Pronounced in the open court on 22.07.2024) (RAMESH NAIR) MEMBER (JUDICIAL) (C L MAHAR) MEMBER (TECHNICAL) Raksha