Customs, Excise and Gold Tribunal - Mumbai
Essex Group Inc. vs Commissioner Of C. Ex. And Cus. on 9 May, 2006
Equivalent citations: [2007]6STT320
ORDER S.S. Sekhon, Member (T)
1. After hearing both sides in this application made for waiver of the entire amount of service tax liability of Rs. 27,68,985/- and penalties @ of Rs. 200/- per day and amount of Rs. 1,000/-arrived at by the lower authorities on the applicants for having entered into an agreement with M/s. Finolex Ltd. The clauses of this agreement, especially paragraph 2.1(a) and 2.1(b) provides for consultancy service for an engineering service, Article 2.1(a) of the agreement provides for services to be rendered in India while 2.1(b) provides for deputing the technicians of M/s. Finolex to observe the manufacturing process.
2. The Ld. Advocate for the applicant look us through the agreement, details and decisions in the case Additional Commissioner of Income-Tax, Bihar v. New Consolidated Gold Fields Limited (London) of Patna High Court 143 ITR 599 and decisions of the Supreme Court . The Ld. Advocate submitted that no services have been infact provided for in terms of Article 2.1(a) and only technician have been sent to the plant in America for observation and of the manufacturing processes as envisaged the letter of manufacturer. He fairly conceded that the amounts have been received by the services provider as per the agreement from M/s. Finolex. However there was no agreement for a break up of the amounts as per para 2 of the agreement. He submits that no service is rendered in India and no services rendered to be either in India in any case for service rendered out either was not covered under the service tax. Liability could not be fastened Under Section 64 of the Finance Act, 1994. The submissions when considered should enable him to get the complete waiver of the pre-deposit requirements for pre-deposit and stay recovery thereof if the tax by this case.
3. Ld. DR on the other hand drew our attention to the said articles and submits that because an amount in question for the services mentioned therein has been paid by M/s. Finolex Ltd. to the service, the appellant there is no objection by M/s. Finolex Ltd. To such payment it should be considered giving effect to an agreement to without objection would mean availment of service. No matter whether services are availed in full or not, since there is no allocation of the amount between services to be rendered in India. He submits that the full amount should be placed as leviable to service tax and since the financial hardship are not pleaded strongly, the Ld. D.R. submits that the appellant should be placed to full pre-deposit terms.
4. On considering the issues we find that the matter of levy of service tax is may be; arguable however considering that both the lower authorities have come to a finding that payment for services rendered in India envisaged to be rendered in India have been effected, we would like to place the applicants to certain terms of pre-deposit in the facts of this case, we would consider and amount of Rs. 7,00,000/- (Rupees seven lakhs only) will meet pre-deposit requirement of Section 35F of Central Excise Act, 1944 to hear this appeal. The pre-deposit now being determined and ordered of Rs. 7 lakhs (Rupees seven lakhs only) should be effective within a period of 8 weeks and compliance thereof reported on 5-7-2006. On such compliance being ascertained further pre-deposit requirements would stands waived and recovery stayed pending regular hearing of the appeal.
(Dictated in Court)