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OFFICE OF THE COMMISSIONER OF

SERVICE TAX
17-B, IAEA HOUSE, MAHATMA GANDHI
MARG, I.P. ESTATE,
NEW DELHI 110 002
www.servicetaxdelhi.gov.in

C.No. I-26(494)ST/AMR-829/Adt/GR-B-VI/2010-11

Dated:

Demandcum- Show Cause Notice No. /Audit//2012-13

M/s. Net4 India Ltd. having Registered office at AB-11, Community Centre,
Safdarjung

Enclave,

New

Delhi-110029

(hereinafter

referred

to

as

"the

assessee") are registered centrally with the Service Tax Commissionerate, Delhi
vide STC No. AAACT0291MST001 dated 16.07.2008 for Online Information and
Data, 'Business Auxiliary Services' and 'Internet Telephony Services' under
Section 69 of the Finance Act, 1994 as amended (hereinafter referred to as the
"Act "). The assessee is obliged to comply with the provisions of the Finance Act,
1994 as amended and Rules and notifications issued there under. The audit of
the assessee was conducted by the officers of Service Tax Commissionerate, New
Delhi on 29.11.2011, 30.11.2011 and 19.12.2011 for the period 2008-09 to
2010-11 under Rule 5A of the Service Tax Rules, 1994 (hereinafter referred to as
the "Rules"). The transgressions noticed during the audit on the basis of
information/data/records provided by the assessee are discussed hereunder.

SERVICE TAX NOT PAID ON THE DOMAIN REGISTRATION CHARGES


2.1

Whereas, during the course of audit and scrutiny of records/data produced

by the party before the audit team, it was observed that the assessee have not
discharged the Service Tax liability on Domain Registration Charges.
2.2

Whereas, accordingly, the assessee, vide this office letter even N. 6082 dated 22.05.2012

(RUD -I) was asked to clarify and to calculate the service tax amount. In response, the assessee vide
letter dated 05.06.2013 &

(RUD-II) submitted the details of Domain Registeration Charages. It was

observed that the assessee had not discharged the Service Tax liability of Rs. 5,91,40,034/- on
Domain Registration Charges during 2008-09, 2009-10, 2010-11 & 2011-12 on
the total amount received in this regard amounting to Rs. 54,11,31,182/- as
detailed below:
Year
2008-09
2009-10
2010-11
2011-12
TOTAL

2.3

Amount
Billed
165219562
180828854
195082766

Amount
Received
165219562
180828854
195082766

Taxable
Amount
165219562
180828854
195082766

Service
Tax
19826347
18082885
19508277

Ed.
Cess
396527
361658
390166

S & H Ed
Cess
198263
180829
195083

Total Tax
Payable
20421137
18625372
20093525

541131182

541131182

541131182

57417509

1148350

574175

59140034

Whereas the assessee has contended that domain name registration was

not defined or specified in any of the clauses of Section 65(105) of the Finance
Act, 1994. If the activity carried out was not specified in any of the Clauses of
Section 65(105) of the Finance Act, 1994 then clearly the said activity was
outside the purview of Service Tax prior to 1 st July, 2012. The provisions of the
Finance Act, 1994 got attracted only if taxable service was provided and not
otherwise. Thus, as domain name registration was not a taxable service prior to
1st July, 2012, as a result, the same was not amenable to levy of Service Tax
prior to 1st July, 2012.
2.4

Whereas, it appears that the assessee provides a wide range of Network &

Application products and services, primarily to businesses. During the course of


audit, it was noticed that the assessee received payments during 2008-09, 2009-

10 and 2010-11 as domain registration charges from their customers/clients.


Domain name is an identification string that defines a realm of administrative
autonomy, authority or control in the internet. In other words, domain name is
the hostname that identifies internet protocol (IP) resources such as web site
and is used in various networking contexts and application specific naming and
addressing purposes and these services are integral part of computer networking
services provided by the assessee.
2.5

Whereas, domain is necessary for hosting data as primary domain

controller and backup domain controller are roles that can be assigned
to a server in a network of computer that use the window NT operating
systems. Window NT uses the idea of domain to manger access to a set
of network resourses ( application, printers and so forth) for a group of
users.

The user had only to log into the domain to gain access to the

resourses, which may located on a number of different server in the


network. Further, Domain name is an identification string that difines a
realm of administrative autonomy , authority, or control onnthe internet.
Domain names are formed by the rules & procedures of the Domain
Name Systems. Any name registered in the Domain Name system is a
domain name.

It is a cyber wallet concept where a person can have the right

to use domain name by paying the domain charges through online and it is an
integral part of computer networking to avail usage of website. This activity being
part of computer networking appears to be covered under Online Information
and Database Access, Retrieval or both in electronic from through Computer
Network falling under Section 65(75)(zh) of the Finance Act, 1994 as amended.
2.6

Whereas, it appears that the assessee is providing services of "online data

base access and/or retrieval" taxable under section 65(105)(zh) read with
section 65 (75) and Section 65(36) of the Finance Act, 1994 and the same has
been rendered by the assessee in India and, therefore, the assessee would be
liable to pay service tax in respect of the same in terms of Provisions of Section
67 of the Finance Act, 1994. The records/data provided by the assessee during

the audit reveals that the service being provided by the designated registrys
sites is "Online Database access and/or retrieval" taxable under section 65(105)
( zh ) read with Section 65(75) and Section 65(36) of the Finance Act, 1994 and
since the same has been used in India, would attract service tax from the
assessee in India under Section 67 of the Finance Act, 1994, as the services have
been consumed in India.
2.7

Whereas the contention of the assessee that these services are provided in

isolation to the services of online data base access and retrieval as above do not
appear to be tenable and the said activity appears to integral part of overall
service and appears to be covered under the On-line Database Access and/or
Retrieval being an integral part of computer networking service provided by the
assessee and introduced as service on 16.07.2001 vide Notification No.4/2001ST.
2.8

Whereas, the definition of on-line information and database access or

retrieval has been given under clause (75) of Section 65 of the Finance Act, 1994
defines
Prior to 16.05.2008 read as:

On-line information & database access or retrieval means providing


data or information, retrievable or otherwise to any customer, in
electronic form through a computer network.
After 16.05.2008 reads as:
Online information & data access or retrieval service means providing data or
information, retrievable or otherwise, to any person, in electronic from through a
computer network
2.9.

Whereas,

Section 65(105)(zh) of the Finance Act, 1994

prior to

16.05.2008 read as :
taxable service means any services provided or to be provided to a customer
by any person, in relation to On-line Information and Database Access or

Retrieval services or both in electronic form through computer network, in any


manner

With effect from 01.05.2006, the term commercial concern was substituted by
the term any person . The consequences of this change are as follows:
For the period prior to 01.05.2006, only services provided or to be
provided by a commercial concern ( and not by any other person) were
liable to tax.
Services provided or to be provided by any person ( including a commercial
concern) on or after 01.05.2006 will be liable to tax.
2.10 After 16.05.2008 Sectiopn 65(105(zh) of the Act ibid reads as:
taxable service means any services provided or to be provided to any person,
in relation to On-line Information and database access or retrieval services or
both in electronic form through computer network, in any manner. Thus these
services are essentially delivered over the internet or an electronic network
which relies on the internet or similar network for their provisions.

Under Section 65(30) of the Finance Act, 1994 read with Section 2(1) (j)
of

the

Information

Technology

Act,

"computer

network"

means

the

interconnection of one or more computers through


(a) the use of satellite, microwave, terrestrial line or communication
media; and
(b) terminals or a complex consisting of two or more inter-connected
computers whether or not the inter-connection is continuously maintained.
For this purpose, the terms computer means any electronic, magnetic, optical
or other high speed data processing device or system which performs logical,
arithmetic, and memory functions by manipulations of electronic, magnetic or
optical impulses, and includes all input, output, processing, storage, computer
software, or communication facilities which are connected or related to the
computer in a computer system or computer network.

2.11 Therefore, from the above it appears that online information and database
access or retrieval services and Computer Network services are taxable service
specified under sub-clauses (zh) of clause 105 of the Section 65 of the Finance
Act, 1994 and in terms of provisions Section 67 of the Finance Act, 1994 (as
amended) and the assessee appears to be liable to pay service tax payable
thereon as a deemed service provider.
2.12 In view of foregoing, as per the details supplied by the assessee during the
audit (RUD-II), the assessee has received the

Domain Registration charges

during 2008-09, 2009-10 and 2010-11 amounting to Rs. 54,11,31,182/- on


which the service tax liability has been worked out to Rs. 5,91,40,034/-(
Rs. Five Crore Ninty One Lakh Forty Thousand & Thirty Four Only) inclusive of
Education Cess and Secondary and Higher Education Cess, which appears to be recoverable
from the assessee in terms of Section 73 of the Finance Act, 1994.
SERVICE TAX NOT PAID ON THE EXPENDITURE INCURED IN FOREIGN
CURRENCY

UNDER

REVERSE

CHARGE

MECHANISM

AS

DOMAIN

REGISTRATION CHARGES
3.1.

Whereas during the course of the audit it was further observed that the

assessee have not discharged the Service Tax liability on the expenditure
incurred in foreign currency under reverse charge mechanism as Domain
Registration charges during 2008-09, 2009-10 and 2010-11.
3.2

Whereas, accordingly, the assessee, vide this office letter even N. 6082 dated 22.05.2012

(RUD I Supra) was asked to clarify and to calculate the service tax amount. In response, the assessee
vide letter dated 05.06.2013 &

(RUD-II Supra) submitted the details of expenditure in foreign

currency incurred on Domain Registration Charges. It was observed that the assessee had not
discharged the Service Tax liability of Rs. 3,37,75,505/- for the total amount paid Rs.
31,42,87,192/- during that period as detailed below:
Year

Amount Billed

Service Tax

Ed. Cess

S & H Ed
Cess

Total
Payable

Tax

2008-09
2009-10
2010-11
2011-12
TOTAL

3.2

68151661
77403264
78867267
89865000
314287192

8178199
7740326
7886727
8986500
32791752

163564
154807
157735
179730
655836

81782
77403
78867
89865
327917

8423545
7972536
8123329
9256095
33775505

Whereas the assessee has contended that domain name registration was

not defined or specified in any of the clauses of Section 65(105) of the Finance
Act, 1994. If the activity carried out was not specified in any of the Clauses of
Section 65(105) of the Finance Act, 1994 then clearly the said activity was
outside the purview of Service Tax prior to 1 st July, 2012. The provisions of the
Finance Act, 1994 got attracted only if taxable service was provided and not
otherwise. Thus, as domain name registration was not a taxable service prior to
1st July, 2012, as a result, the same was not amendable to levy of Service Tax
prior to 1st July, 2012.
3.3

Whereas, it appears that the assessee provides a wide range of Network &

Application products and services, primarily to businesses. During the course of


audit, it was noticed that the assessee has incurred certain expenditure in foreign
currency during 2008-09, 2009-10 and 2010-11 as domain fee to purchase
various domain names from the designated registrys sites located abroad.
Domain name is an identification string that defines a realm of administrative
autonomy, authority or control in the internet. In other words, domain name is
the hostname that identifies internet protocol (IP) resources such as web site and
is used in various networking contexts and application specific naming and
addressing purposes and these services are integral part of computer networking
services provided by the assessee. It is a cyber wallet concept where a person
can have the right to use domain name by paying the domain charges through
online and it is an integral part of computer networking to avail usage of website.
This activity being part of computer networking appears to be covered under
Online Information and Database Access, Retrieval or both in electronic from
through Computer Network falling under Section 65(75)(zh) of the Finance Act,

1994 as amended.
3.4

Whereas the

designated registrys sites located abroad are providing

services of "online data base access and/or retrieval" taxable under section
65(105)(zh) read with section 65 (75) and Section 65(36) of the Finance Act,
1994 and the same has been received by the assessee in India and, therefore,
the assessee would be liable to pay service tax in respect of the same in terms of
Provisions of Section 66A of the Finance Act, 1994 read with Rule 2(1)(d)(iv) of
the service tax Rule 1994. The records/data provided by the assessee during the
audit reveals that the service being provided by the designated registrys sites is
"Online Database access and/or retrieval" taxable under section 65(105)( zh )
read with Section 65(75) and Section 65(36) of the Finance Act, 1994 and since
the same has been used in India, would attract service tax from the assessee in
India under reverse charge mechanism of section 66A of the Finance Act, 1994
read with Rule 2(1)(d)(iv) of the Service Tax Rules, 1994, as the services have
been consumed in India by the assessee.
3.5

Whereas the contention of the assessee that these services are provided in

isolation to the services of online data base access and retrieval as above do not
appear to be tenable and the said activity appears to integral part of overall
service and appears to be covered under the On-line Database Access and/or
Retrieval being an integral part of computer networking service provided by the
assessee and introduced as service on 16.07.2001 vide Notification No.4/2001ST. of the Finance Act, 1994,.

On-line Database Access and/or Retrieval -as

providing data or information, retrievable or otherwise to any customer in


electronic form through a computer network. Section 65(105)(zh) of the Finance
Act, 1994 defines a taxable service in relation to On-line Information and
Database Access or Retrieval services or both as any such service provided or to
be provided to any person, by any person in electronic form through computer
network, in any manner. Thus, these services are essentially delivered over the
internet or an electronic network which relies on the internet or similar network

for their provision. Section 65(30) of the Finance Act, 1994 defines a "computer
network" as having the meaning assigned to it in Section 2(1)(j) of the
Information Technology Act,2000 (21 of 2000). In turn, the said provision defines
the term as the inter-connection of one or more computers through :(a) the use
of satellite, microwave, terrestrial line or communication media; and(b) terminals
or a complex consisting of two or more inter-connected computers whether or
not the inter-connection is continuously maintained. Section 65(36) of the
Finance Act, 1994 states that "data" has the meaning assigned to it in Section
2(1)(o) of the Information Technology Act, 2000 (21 of 2000), which is "a
representation of information, knowledge, facts, concepts or instructions which
are being prepared or have been prepared in a formalized manner, and is
intended to be processed, is being processed or has been processed in a
computer system or computer network and may be in any form (including
computer printouts, magnetic or optical storage media, punched cards, punched
tapes) or stored internally in the memory of a computer.
3.6

Therefore, from the above it appears that online information and database

access or retrieval services and Computer Network services are taxable service
specified under sub-clauses (zh) of clause 105 of the Section 65 of the Finance
Act, 1994 and in terms of provisions Section 66 A of the Finance Act, 1994 (as
amended) read with Rule 3 of Taxation of Services (Provided from Outside India
and Received in India) Rules, 2006 the assessee being recipient of the service in
India appears to be liable to pay service tax payable thereon as a deemed
service provider.
3.7

And whereas, it appears that the services received by the assessee appear

to be imported services in terms of Rule 3(iii) of the Taxation of Services


(Provided from Outside India and Received in India) Rules, 2006 in as much as
the Online Information and Database Access or Retrieval Services and
Computer Network Services in relation to business or commerce are received by

the assessee in India and are provided by an overseas service providers.


3.8

Whereas, Whereas, Section 66A of the Finance Act, 1994, as amended,

reads as under:Section 66A -Charge of service tax on services received from outside India, (1) Where any service specified in clause (105) of section 65 is,
(a) provided or to be provided by a person who has established a business
or has a fixed establishment from which the service is provided or to be
provided or has his permanent address or usual place of residence, in a
country other than India, and
(b) received by a person (hereinafter referred to as the recipient) who has
his place of business, fixed establishment, permanent address or usual
place of residence, in India, such service shall, for the purposes of this
section, be taxable service, and such taxable service shall be treated as if
the recipient had himself provided the service in India, and accordingly all
the provisions of this Chapter shall apply:
Provided that where the recipient of the service is an individual and such
service received by him is otherwise than for the purpose of use in any
business or commerce, the provisions of this sub-section shall not apply:
Provided further that where the provider of the service has his business
establishment both in that country and elsewhere, the country, where the
establishment of the provider of service directly concerned with the
provision of service is located, shall be treated as the country from which
the service is provided or to be provided.
(2) Where a person is carrying on a business through a permanent
establishment in India and through another permanent establishment in a
country other than India, such permanent establishments shall be treated

as separate persons for the purposes of this section.


3.9

Whereas, Section 67 of the Finance Act, 1994, as amended, reads as

under:Section 67. Valuation of taxable services for charging Service tax (1) Subject to the provisions of this Chapter, service tax chargeable on any
taxable service with reference to its value shall,
(i) in a case where the provision of service is for a consideration in money,
be the gross amount charged by the service provider for such service
provided or to be provided by him;
(ii) in a case where the provision of service is for a consideration not wholly
or partly consisting of money, be such amount in money, with the addition
of service tax charged, is equivalent to the consideration;
(iii) in a case where the provision of service is for a consideration which is
not ascertainable, be the amount as may be determined in the prescribed
manner.
(2) Where the gross amount charged by a service provider, for the service
provided or to be provided is inclusive of service tax payable, the value of
such taxable service shall be such amount as, with the addition of tax
payable, is equal to the gross amount charged.
(3) The gross amount charged for the taxable service shall include any
amount received towards the taxable service before, during or after
provision of such service.
(4) Subject to the provisions of sub-sections (1), (2) and (3), the value

shall be determined in such manner as may be prescribed.


Explanation.For the purposes of this section,
(a) consideration includes any amount that is payable for the taxable services
provided or to be provided;
(b) money includes any currency, cheque, promissory note, letter of credit,
draft, pay order, travelers cheque, money order, postal remittance and other
similar instruments but does not include currency that is held for its numismatic
value;
(c) gross amount charged includes payment by cheque, credit card, deduction
from account and any form of payment by issue of credit notes or debit notes
and [book adjustment, and any amount credited or debited, as the case may be,
to any account, whether called Suspense account or by any other name, in the
books of account of a person liable to pay service tax, where the transaction of
taxable service is with any associated enterprise.]

3.10 In view of foregoing, as per the details supplied by the assessee during the
audit (RUD-II), the total expenditure incurred by the assessee in foreign
currency as Domain Registration charges during 2008-09, 2009-10, 2010-11 and
2011-12 amounting to Rs.31,42,87,192/- on which the service tax liability has
been worked out to Rs. 3,37,75,505/-( Rs. Three Crore Thirty Seven Lakh
Seventy Five Thousand Five Hundred & Five only) inclusive of Education Cess
and Secondary and Higher Education Cess , which appears to be recoverable from the
assessee in terms of Section 73 of the Finance Act, 1994.
4.

Whereas, as per Section 67 of the said Act, the value of any taxable

service shall be the gross amount charged by the service provider for such
services provided or to be provided by him. Thus, the assessee in the present
case appears to be liable to discharge their Service Tax liability on the value
charged and received from their clients/customers for rendering the services of
Online Database access and/or retrieval and liable to discharge the Service Tax
on the same as discussed supra.

5.

Whereas, Section 68 of the Finance Act, 1994 provides that every person

providing taxable service to any person shall pay Service Tax at the specified
rates and in such manner and within such period as may be prescribed. Further,
Rule 6 of the Service Tax Rules, 1994 stipulates that Service Tax shall be paid to
the credit of the Central Government, by the 5 th or 6th of the month, as the case
may be, (5th or 6th of the quarter in the case of the individual, proprietary or
partnership concerns) immediately following the calendar month, in which the
payments are received, towards the value of taxable services. The assessee in
the present case appears to have contravened the provisions of the said Section /
Rule by way of not depositing the amount of due tax to the credit of the Central
Government at the prescribed time and in the prescribed manner. The offence of
assessee further gets aggravated from the fact that even after the fact coming to
the notice, they are yet to discharge their Service Tax liability for the mentioned
period on the taxable services of Online Database access and/or retrieval being
rendered by them and liable to pay Service Tax on the same as discussed supra.
The noticee / assessee is working under the self-assessment and the onus to pay
proper Service Tax is on itself. The fact that they have rendered services, which
are taxable under Service Tax and liable to pay Service Tax, has come to the
notice only after the Central Excise Audit of the Noticee/ assessee and further
investigations advanced by the Anti Evasion Branch in the present case and not
declared by the assessee on their own. From the act of omission done by the
party, it appears that they have deliberately tried to suppress the facts from the
Department with the intention to evade the payment of Service Tax.
6.

Whereas, as per Section 75 of the Act ibid every person, liable to pay the

tax in accordance with the provisions of Section 68 or Rules made there under,
who fails to credit the Service Tax or any part thereof to the account of Central
Government within the period prescribed, shall pay simple interest at such rate
not below ten percent and not exceeding thirty six percent per annum, as is for
the time being fixed by the Central Government, by Notification in the Official

Gazette for the period by which such crediting of the tax or any part thereof is
delayed.
7.

Whereas, as per Section 76 of the Act ibid any person, liable to pay Service

Tax in accordance with the provisions of Section 68 of the Rules made there
under, who fails to pay such tax shall pay in addition to paying such tax and
interest on that tax in accordance with the provisions of Section 75 a penalty
which shall be not less than two hundred Rupees for every day during which such
failures continues or at the rate of two percent of such tax, per month, whichever
is higher, starting with the first day after the due date till the date of actual
payment of the outstanding amount of Service Tax, provided that the total
amount of the penalty payable in terms of this Section shall not exceed the
Service Tax payable.
8.

Whereas as per Section 77(2) of the Act ibid, any person, who contravenes

any of the provisions of this chapter or any Rules made there under for which no
penalty is separately provided in this Chapter, shall be liable to a penalty which
may extend to five thousand Rupees.
9.

Whereas, It further appears that the Assessee, by doing so, had intentionally and wilfully suppressed the facts from

the department and did not file proper/prescribed ST-3 returns accordingly. But for the Audit, the fact of providing and
receiving the said services would not have been known the department. They are working under self-assessment and the
onus to pay proper Service Tax is on them. Thus, by not disclosing the facts to the department i.e. by suppressing the facts
from the Department, the said value has escaped the assessment for Service Tax liability, resulting into contravention of
various provisions of the said Act and the said Rules aforesaid with intent to evade payment of impugned Service Tax.
Thus, it appears that the provision of Section 73 of the Act ibid can be invoked and demand and recovery can be made for
non-levy and non-payment of Service Tax for five years from relevant date

10

Whereas Section 78 of the Act ibid lays down that if any Service Tax has

not been levied or not paid or has been short levied or short paid or erroneously
refunded, by reason of:
a fraud; or

b collusion; or
c willful misstatement; or
d suppression of facts; or
e contravention of any of the provisions of this Chapter or of the rules
made there under with intent to evade payment of Service Tax. the
person, is liable to pay such Service Tax or erroneously refunded, as
determined under sub-section (2) of Section 73, shall also be liable to
pay the penalty, in addition to such Service Tax and interest, thereon, if
any, payable by him, which shall not be less than, but which shall not
exceed twice, the amount of Service Tax so not levied or paid or short
levied or short paid or erroneously refunded.
In this case, since, the party has not paid the Service Tax either in the self
assessment scheme at its own behest in the first place, nor has it paid even after
being pointed out on commencement of investigation by this office. It appears
that intent to evade Service Tax is rather evident and therefore, penalty under
Section 78 is applicable.
11.

Further, as discussed above, it appears that the assessee

deliberately

indulged in concealing the facts from the Department with the sole intention to
avoid payment of Service Tax to the Government Exchequer.

Thus, by not

disclosing the entire facts to the Department, the said value has escaped the
assessment for Service Tax liability, resulting into contravention of various
provisions of the said Act and the said Rules aforesaid. Thus, it appears that the
provision of Section 73 of the Act ibid can be invoked and thus, demand and
recovery can be made for non-levy and non-payment of Service Tax for five years
from relevant date. Therefore, Service Tax amounting to Rs. 7,30,24,451/-,
Education Cess amounting to Rs. 14,60,489/-, Secondary & Higher Education
Cess amounting to Rs. 7,30,244/- (collectively amounting to 7,52,15,184/-)
during the mentioned period

appears to be recoverable from the assessee

alongwith interest for late payments by invoking extended period as is applicable

under Section 73 of the said Act. It also appears that the party has contravened
the provisions of Section 68 of the said Act, read with Rule 6 of the said Rules, in
as much as they have not paid to the credit to the Central Government, due
amount of Service Tax on time as prescribed. Therefore, the Party appears liable
for penal action under Section 76 of the said Act for not depositing the
Government due on time as prescribed. The party also appears to be liable for
imposition of penalty under Section 78 of the Act ibid for their deliberate evasion
of Service Tax. Therefore, the Party also appears liable for penalty under Section
77(2) of the Finance Act, 1994 as amended for contravention of Section 69 and
70 of the said Act.
12

Now, therefore, M/s. Net4 India Ltd., AB-11, Community Centre,

Safdarjung Enclave, New Delhi-110029 are required to show cause to the


Commissioner, Service Tax Commissionerate, having office located IAEA House,
17-B, I.P. Estate (near W.H.O. Building), Ring Road, New Delhi 110 002 within
30 days of receipt of this notice as to why:(i)

Service tax amounting to Rs. 7,30,24,451/- (Rupees Seven Crores


Thirty Lacs Twenty Four Thousands Four Hundreds & Fifty One
only) as detailed in Para 2.2 and 3.2 above should not be demanded and
recovered from them under proviso to Section 73 (1) of Finance Act, 1994
read with Section 66 and Section 68 of the Act ibid read with Rule 6 of the
Service Tax Rules, 1994;

(ii) Education Cess amounting to Rs. 14,60,489/- (Rupees Fourteen Lacs


Sixty Thousands Four Hundreds & Eighty Nine only) as detailed in
Para 2.2 and 3.2 above should not be demanded and recovered from them
under proviso to Section 73 (1) of Finance Act, 1994 read with Section 66
and Section 68 of the Act ibid read with Rule 6 of the Service Tax Rules,
1994 read with Section 91 and Section 95 of Finance Act, 2004;

(iii) Secondary and Higher Education Cess amounting to Rs. 7,30,244/(Rupees Seven Lacs Thirty Thousands Two Hundreds & Forty Four
only) as detailed in para 2.2 and 3.2 above should not be demanded and
recovered from them under proviso to Section 73 (1) of Finance Act, 1994
read with Section 66 and Section 68 of the Act ibid read with Rule 6 of the
Service Tax Rules, 1994 read with Section 136 read with Section 140 of the
Finance Act, 2007;
(i)

Interest at the appropriate rate on the above amounts from the due date
till the date of actual payment of service tax should not be demanded and
recovered from them under Section 75 of the Act ibid;

(v)

Penalty under Section 76 of the Finance Act, 1994 should not be imposed
upon them for failure to pay the Service Tax in accordance with the
provision of Section 68 of the said Act read with Rule 6 of Service Tax
Rules, 1994;

(vi)

Penalty under Section 78 of the said Act should not be imposed upon them
for deliberately suppressing the facts with the intention to evade payment
of Service Tax.

(vii) Penalty under Section 77 of the said Act Should not be imposed upon them
for non filing of proper returns in violation of provisions of the finance Act,
1994 and rules made there under.

13.

M/s.

Net4

India

Ltd.,

AB-11,

Community

Centre,

Safdarjung

Enclave, New Delhi-110029 is required to produce at the time of showing


cause, all evidence upon which they intend to rely upon in support of their
defence. They are also required to indicate in their written reply as to whether
they wish to be heard in person before the case is adjudicated failing which it
would be construed that they do not wish to be heard in person.
14.

If no show cause is shown against the action proposed to be taken, within

the stipulated period and/ or they dont seek personal hearing and / or they do

not appear before the adjudicating authority when the case is posted for hearing,
the case will be decided on the basis of evidences available on records.
15.

This Show Cause Notice is being issued without prejudice to any other

action that may be taken against the M/s. Net4 India Ltd., under provisions of
the Finance Act, 1994, and the Rules made there under or any other law for the
time being in force in India.
Encl: All relied upon documents (

Pages)

Commissioner,
Service Tax Commissionerate,
Delhi.
Regd. A/D
M/s. Net4 India Ltd.,
AB-11, Community Centre,
Safdarjung Enclave,
New Delhi-110029