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PM-STIAC discusses accelerating Industry-Academia Partnership for Research and InnovationIndia, Singapore hold dialogue over cyber policy44 bids received under 10th Round of Commercial Coal Mine AuctionsCops arrest former Dy PM of Nepal in cooperative fraud casePuri highlights India's Petrochemical potential at India Chem 2024UN reports record high cocaine production in ColombiaMinister unveils 'Aviation Park' showcasing India's Aviation HeritageED finds PFI wanted to start Islamic movement in IndiaBlocking Credit - Rule 86ASEBI says investors can use 3-in-1 accounts to apply online for securitiesI-T- Penalty u/s 271(1)(b) need not be imposed when assessee moved an adjournment application & later complied with notice u/s 142(1): ITAT4 Kanwariyas killed as vehicle runs over them in Banka, BiharI-T- Accounting principles do not prescribe maintaining of a day-to-day stock register, and the books of accounts cannot be rejected on this basis alone: ITATUN food looted and diverted to army in EthiopiaCus - Alleged breach of conditions for operating public bonded warehouse; CESTAT rightly rejected allegations, having found no evidence of any such breach: HCUS budget deficit surges beyond USD 1.8 trillionST - Onus for proving admissibility of Cenvat Credit rests with service provider under Rule 9(6) of the Cenvat Credit Rules, 2004: CESTATIf China goes into Taiwan, Trump promises to impose additional tariffsRussians love Indian films; Putin lauds BollywoodCus - Classification of goods is to be determined in accordance with Customs Tariff Act & General Interpretative Rules; Country-of-Origin Certificate may offer some guidance, but cannot solely dictate classification: CESTATCus - Benefit of such Country-of-Origin certificates cannot be denied if all relevant conditions are met under the applicable Customs Tariff rules: CESTATCuban power grid collapses; Country plunges into darknessCus - As per trite law, merely claiming a classification or exemption does not constitute mis-declaration or suppression - any misclassification does not equate to willful intent to evade duty: CESTATKarnataka mulling over 2% fee on aggregator platforms to bankroll gig worker welfare fundCus - Extended limitation cannot be invoked in case of assessee who is a regular importer with a consistent classification approach: CESTAT
 
ST - Applicant providing technical knowhow service - although they have made entries in books, they have not received any amounts for providing service - prior to May, 2008, ST was payable only on receipt basis - Stay granted: CESTAT

By TIOL News Service

MUMBAI, DEC 06, 2012: THE applicant is a manufacturer of bulk drugs and they are having separate Research and Development Division and they are providing technical knowhow service to M/s. Doctors Organics Chemical Ltd. and M/s. Bravo Healthcare Limited during the period April 2004 to March 2009. They have raised invoices to these concerns for providing the service of technical knowhow and business auxiliary services.

Alleging that Service tax is payable, a demand was raised and the same has been confirmed by the CCE, Raigad.

The applicant is before the CESTAT seeking waiver of pre-deposit of Rs.1,56,71,018/- along with interest and various penalties imposed under the Finance Act, 1994.

It is submitted that -

+ the applicant has not received any amounts towards providing the above service, therefore, they are not liable to pay any service tax at all.

+ prior to May, 2008 service tax was payable on actual receipt of the amount of service rendered from the service recipient.

+ It is a fact on record that only entries were made in the books of accounts of service recipient as well as the service provider but no amount for service rendered has been recovered.

+ the adjudicating authority has classified their service of ‘technical knowhow' under the category of 'Scientific and Technical Consultancy Service' and which is improper so they are not liable to pay service tax post May, 2008 also.

The Revenue representative submitted that as the appellant has raised invoices for technical know services which is correctly classified by the adjudicating authority under the category of ‘Scientific and Technical Consultancy Services', it is immaterial whether they have received or not the amount for service rendered.

The Bench observed -

"5. … Prima facie we are convinced with the argument advanced by the learned counsel that, prior to May, 2008 service tax is payable on receipt basis and it is a fact on record that the applicant has not received any amount towards rendered service at all although they have made entries in their books of account. Therefore, prima facie they have made out a case for the period prior to May, 2008. Further, we have gone through the definition of ‘Scientific and Technical Consultancy Services' as defined under Section 65(92) of the Finance Act, 1994 and we are of the view that the applicant does not qualify under the said definition also. Therefore, the applicant have made out a case for 100% waiver of pre-deposit for the period post May, 2008 also."

Holding that the applicant had made out a case for complete waiver of the pre-deposit of the adjudged dues, Stay was granted.

(See 2012-TIOL-1789-CESTAT-MUM)


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