UNITED PHOSPHORUS LTD. Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) THE appeal and stay application are directed against Order -in -Original No. 5/ST/HB/2012 -13, dated 27 -9 -2012 passed by the Commissioner of Service Tax (Adjn.), Mumbai. The appellant M/s. United Phosphorus Ltd. wanted to market agro -chemicals in the United States of America (USA). In order to do that, they need to obtain registration from United States Environmental Protection Authority (USEPA). To obtain this registration, they were required to provide technical data/information about the products. They obtained such information from the various other companies in USA by paying Data Access Fee. The department was of the view that this acquisition of technical data is leviable to Service Tax under the category of 'Business Auxiliary Service' inasmuch as it promotes promotion or marketing/sale of goods of the appellant in the USA and therefore, under reverse charge mechanism, they were directed to pay Service Tax amounting to Rs. 3,01,40,045/ - for the period 18 -4 -2006 to 30 -6 -2009 along with interest thereon. A penalty of equivalent amount was imposed under Section 78 apart from a penalty of Rs. 5000/ - under Section 77 of the Finance Act, 1994. Hence, the appellant is before us.

(2.) THE learned counsel for the appellant submits that the appellant obtained technical data from the company based in USA, which are readily available. It is not as if that this data was created for the appellant. Test was conducted by the company in the USA in respect of similar products to study the effects on the environment. The same data was useful for the appellant also. Thus, the activity would not come under the purview of Business Auxiliary Service which envisages service to promote or market or sell the goods on behalf of the appellant. No such activity has been undertaken by the foreign company in their case and, therefore, the demand of Service Tax under 'Business Auxiliary Service' is not sustainable in law. Accordingly, he pleads for grant of stay.

(3.) WE have carefully considered the rival submissions.