Kalpataru Power Transmission Ltd Vs C.C.E. & S.T. (CESTAT Ahmedabad)
Held that 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 and such establishment situated abroad as a ‘separate person’.
Facts-
The intelligence was gathered that appellant received various services from abroad but had not been paying service tax appropriately on the value of services received from the service providers who are not having fixed establishment in India under the provisions of Section 66A of the Finance Act, 1994. Investigation against the Appellant was initiated. As a result of investigation, it is found that Appellant have not paid /short paid service tax amounting to Rs. 10,01,69,147/- under different services. Resultantly, the appellants were issued notice dated 17.04.2013 demanding service tax during the period July 2007 to March 2012 from the abroad.
The Adjudicating Authority vide impugned order confirmed the above demand of Service Tax amounting to Rs. 10,01,69,146/- along with interest and imposed penalty at the rate of Rs. 200/- per day or 2% per month, whichever is higher u/s. 76 and also imposed a penalty equal to tax demanded u/s. 78 of the Act. In addition, he also imposed penalty of Rs. 10,000/- in terms of the provisions of Section 77(2) of the Finance Act,1944. Separate penalty also imposed of Rs. 10,000/- or Rs. 200/- per day, whichever is greater, in terms of the provisions of Section 77(1)(C) of the Finance Act, 1994 on Shri M K Harsh. Hence, the appellants have filed present Appeals before this Tribunal.
Conclusion-
Supply of tangible goods services – as the said services was provided and consumed outside India. Demand of service tax is not sustainable.
Cargo handling services – These payment are exclusively related to the services at overseas country for the business and commerce at overseas country. in the light of the judgment of M/s. British Airways v. CCE, held that 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 and such establishment situated abroad as a ‘separate person’. Therefore, demand of service tax confirmed by the Ld. Commissioner on above ground legally not correct.
IT Services – held that the services provided by the overseas service provider to the overseas site offices of the appellant cannot be said to be received in India when the same is provided outside India, used outside India and paid outside India, consequently demand is not sustainable.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The present appeals have been filed by Appellants against the Order-in-Original No. AHM-EXCUS-003-COM-029-14-15 dated 20.01.2015
2. Briefly stated the facts of the case are that the intelligence was gathered that appellant received the various services from abroad but had not been paying service tax appropriately on the value of services received from the service providers who are not having fixed establishment in India under the provisions of Section 66A of the Finance Act, 1994. Investigation against the Appellant was initiated. As a result of investigation, it is found that Appellant have not paid /short paid service tax amounting to Rs. 10,01,69,147/- under different services. Resultantly, the appellants were issued notice dated 17.04.2013 demanding service tax on the following services received during the period July 2007 to March 2012 from the abroad. Following are the services for which demands are raised.
