2009 (5) TMI 816 - AT - Service Tax

Summary

Issues:
- Waiver of pre-deposit of Service tax and penalty amount
- Non-payment of Service tax on various transactions
- Disallowance of Service tax credit availed and utilized
- Validity of exemption under Notification 6/99
- Acceptance of photocopies of invoices for availing tax credit

Analysis:
1. The appellants sought a waiver of pre-deposit of Service tax amounting to Rs. 66,67,821/- and penalty. The demands included non-payment of Service tax on different transactions, disallowance of Service tax credit, and validity of exemptions under Notification 6/99.

2. Regarding demands related to non-payment of Service tax on out of pocket expenses, the appellants argued that these expenses should be deducted from the assessable value for Service tax purposes. They relied on a previous Tribunal decision supporting their contention.

3. Concerning the demand linked to foreign currency receipts, the appellants claimed exemption under Notification 6/99, stating that only the amount sent outside India should be taxable. The denial of exemption for the remaining amount received was challenged.

4. The appellants contested the disallowance of Service tax credit due to availing it based on photocopies of invoices instead of original ones. They argued that since there was no dispute about the payment of Service tax, the denial was unjustified.

5. The Revenue opposed the appellants' claims, stating that there is no provision for reimbursement of out of pocket expenses under Service tax laws. They also argued that tax credit can only be availed with original invoices, not photocopies, as per Cenvat Credit Rules.

6. The Tribunal noted that the appellants sought reimbursement for out of pocket expenses related to services provided. While a previous decision supported similar claims, in this case, the expenses were directly linked to services rendered, unlike the previous case.

7. Concerning foreign currency receipts, the Tribunal found that the appellants were liable to pay Service tax on the amount sent outside India, as the exemption under Notification 6/99 was not applicable to the total amount received from the foreign client.

8. Regarding the tax credit availed based on photocopies of invoices, the Tribunal held that photocopies are not valid duty paying documents as per Cenvat Credit Rules. The appellants were directed to pre-deposit 25% of the tax amount within eight weeks, with the remaining amount and penalty waived during the appeal's pendency.