Case Law Details
LG Electronics India Pvt. Ltd. Vs Commissioner of Central Excise (CESTAT Allahabad)
The case of LG Electronics India Pvt. Ltd. vs. Commissioner of Central Excise involves an appeal against an order passed by the Commissioner (Appeals), Customs, Central Excise & Service Tax, Noida. The order upheld the demand for service tax, recovery of the confirmed demand along with interest, and imposition of penalties under various sections of the Finance Act, 1994.
LG Electronics India Pvt. Ltd. (“the appellant”) is registered as a manufacturer of consumer electronic goods and also as a service provider for various taxable services. They export their products to various countries and appointed a commission agent, LG Electronics Inc, Korea, to promote their sales. An agreement was entered into specifying the terms and conditions for engaging the service provider. The appellant was required to pay service tax on the commission received under the reverse charge mechanism, but they claimed exemption under Notification No. 18/2009-ST by following the prescribed procedure.
The dispute arose when audit officers alleged that the appellant had not paid service tax amounting to Rs. 30,71,176 on commissions paid to a foreign service provider during the financial year 2009-10. A show cause notice was issued, and after adjudication, the demand for service tax, interest, and penalties was confirmed.
The appellant contested the order, arguing that they were entitled to the exemption under Notification No. 18/2009-ST and had fulfilled the necessary conditions. They claimed that the commission amount was paid for the procurement of export orders and should be exempt from service tax. The appellant also argued that the demand was beyond the limitation period and that they had provided all necessary information, even if not immediately available during the audit.
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