Custom, Excise & Service Tax Tribunal
Torry Harris Seafoods (P) Ltd vs The Commissioner Of Central Excise, ... on 13 September, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/27692/2013-SM [Arising out of Order-in-Appeal No. 39/2013 dated 30/05/2013 passed by Commissioner of Central Excise and Service Tax (Appeal), COCHIN] Torry Harris Seafoods (P) Ltd Door. No. 9/572, Thirumala Ward, C.c.n.b.road, Chungam ALAPPUZHA - 688010 KERALA Appellant(s) Versus The Commissioner of Central Excise, Customs and Service Tax (Appeals) C.R. Building, I.S. Press Road COCHIN - 682 018 Respondent(s)
Appearance:
Mr. Abraham Markos, Advocate JOSEPH &KURIYAN 42/2260, PROVIDENCE ROAD KOCHIN - 682018 KERALA For the Appellant Dr. J. Harish, AR For the Respondent Date of Hearing: 13/09/2017 Date of Decision: 13/09/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 22047 / 2017 Per : S.S GARG The present appeal is directed against the impugned order dated 30.5.2013 passed by the Commissioner (A) whereby the Commissioner (A) has dropped the penalty imposed under Section 76 and upheld the penalty under Section 78.
2. Briefly the facts of the case are that the appellants are processing and exporting seafoods. They are procuring orders for export of marine products through agents in India and abroad. For the agents abroad, they were paying commission directly and these agents do not have any office in India. The service provided by a person located outside of India who do not have an office in India is taxable in the hands of the service receiver, as per Rule 2(l)(d)(iv) of Service Tax Rules, 1994 w.e.f 9.7.2004. Since the appellant have paid service tax only from 18.4.2006 onwards in respect of the services received from outside India, they were required to pay service tax along with interest vide Order-in-Original dated 18.9.2008 by the Joint Commissioner of Central Excise, Kochi. Penalties were also imposed under Section 76, 77 and 78 of the Finance Act, 1994. The demand was for Rs.21,85,920/- for the period from 9.7.2004 to 31.3.2007 out of which Rs.7,57,351/- already paid was appropriated.
3. Heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without appreciating the facts and the law. He further submitted that the appellant paid the duty on being pointed out by the Department. He also submitted that appellant entertained a bona fide belief that they are not liable to pay the service tax on reverse charge basis. He also submitted that the Honble High Court of Bombay in the case of Indian National Ship Owners Association: 2009 (13) STR 235 (Bom.) has held that recipient in India is liable to pay service tax for the services received from abroad only from 18.4.2006 after the amendment to Section 66A of the Finance Act, 1994. Learned counsel further submitted that during the relevant period, there was a confusion which was set right by the judgment of the Honble High Court of Bombay cited supra. He further submitted that though the appellant had not paid the interest at the time when the Commissioner (A) passed the order, but subsequently, when they filed the appeal before the Tribunal, there was a direction by the Tribunal vide its order dated 27.12.2013 to pay the entire amount of interest and consequently, the appellant deposited an amount of Rs.78,837/- as interest.
5. On the other hand, the learned AR reiterated the findings of the impugned order.
6. After considering the submissions of both the parties, I am of the considered view that during the relevant period, there was confusion with regard to payment of service tax on reverse charge basis and as soon as the Honble Bombay High Court has cleared the position of law that the assessee is liable to pay the service tax for the services received from abroad only from 18.4.2006 when the amendment to Section 66A of the Finance Act was made. Therefore, by resorting to the provisions of Section 80, I am of the view that the appellant is not liable to pay penalty under Section 78 also. Therefore, I drop the penalty imposed under Section 78 by allowing the appeal of the appellant.
(Operative portion of the Order was pronounced in Open Court on 13/09/2017) S.S GARG JUDICIAL MEMBER rv 4