TECH MAHINDRA LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appeal is directed against Order -in -Original No. 06/PIII/ST/COMMR/2 -12 -13, dated 4 -7 -2012 passed by the Commissioner of Central Excise, Pune -III Commissionerate. Vide the impugned order, the learned adjudicating authority has confirmed a service tax demand of Rs. 3,93,19,650/ - along with interest thereon under the provisions of Chapter V of the Finance Act, 1994 against the appellant M/s. Tech Mahindra Ltd. in respect of the services received by them from abroad for which payments were made by the appellant.

(2.) The authority has also imposed penalties of Rs. 5,000/ - and Rs. 3,93,19,650/ - under the provisions of Sections 77 and 78 of the Finance Act, 1994. Aggrieved of the same, the appellant is before us. The brief facts relating to the case are as follows:

(3.) THE learned counsel for the appellant submits that the appellant was under the bona fide belief that they were not liable to service tax on the services received from abroad since the same was in relation to information technology services provided by them to their clients situated abroad. Since during the material period there was no service tax on 'Information Technology Services', they were under the bona fide belief that they were not required to pay service tax on the services received from abroad in respect of 'Business Auxiliary Services'. It is further contended that the Director General of Central Excise Intelligence investigated the transactions of the appellant in respect of various services received during the period from 19 -4 -2006 to 31 -3 -2008 and a show cause notice dated 10 -3 -2010 was issued to the appellant in respect of various services, namely, Commercial Training or Coaching Services, Manpower Recruitment or Supply Agency Services, Interior Decorator Services and Business Support Services. Thus, the department was aware of the receipt of services under the category of 'Business Auxiliary Services' also. However, the same was not included in the show cause notice dated 10 -3 -2010 and another show cause notice dated 8 -4 -2011 has been issued after a gap of more than a year. It is also contended that the fact of payment of consideration for the services rendered is included in the balance sheet for the corresponding years and these balance sheets had been submitted to the department. The show cause notice also records the fact that the supplementary notes to the financial statements to the annual report of 2005 -2006 and 2006 -2007 indicate the payments made in foreign currency to their foreign group companies, who acted as commission agents. The only reason taken by the department in the show cause notice is that the assessee had not reported these payments made in the ST -3 returns for the corresponding period. It is their contention that in the ST -3 returns there is no column or provision for indicating the payments or considerations for services received from abroad during the material period and, therefore, there was no requirement on the part of the appellant to submit this information to the department.