2009 (6) TMI 890 - AT - Service Tax

Summary

Issues:
1. Stay petition against waiver of pre-deposit of service tax amounts and penalty.
2. Service tax liability on passenger baggage, terminal charges for export consignment, and income from renting out premises for X-ray machines.
3. Interpretation of Board's circular dated 1-8-2002 regarding service tax liability.
4. Prima facie case for waiver of certain amounts and stay of recovery.

Analysis:

1. The judgment pertains to a stay petition challenging the waiver of pre-deposit of service tax amounts and penalty. The amounts in question are specified as Service Tax of Rs. 37,24,545/-, Rs. 1,00,592/-, Rs. 90,575/-, and a penalty of Rs. 200/- per day or 2% of the tax not paid, whichever is higher.

2. The service tax liability is disputed on three grounds: (1) passenger baggage as storage and warehousing services, (2) terminal charges for export consignment, and (3) income from renting out premises for installing X-ray machines. The appellant argues that the Board's circular dated 1-8-2002 supports their case regarding the exclusion of passenger baggage from service tax, non-taxability of terminal charges for export consignment, and the exemption for income received from Air India and Indian Airlines for renting out premises for X-ray machines.

3. The interpretation of the Board's circular dated 1-8-2002 is crucial in determining the service tax liability. The circular is cited by both parties to support their respective positions. The appellant relies on the circular to assert exemptions, while the JCDR argues for tax liability on specific grounds such as handling charges for non-accompanied baggage and renting out of premises.

4. After considering the submissions and records, the Tribunal rules in favor of the appellant on the service tax liability concerning passenger baggage and terminal charges. The Tribunal finds that the Board's Circular excludes passenger baggage from service tax and clarifies that tax liability does not apply to export consignments. However, regarding the income received from Air India, the Tribunal directs the appellant to deposit Rs. 90,575/- within a specified period, indicating a lack of a prima facie case for waiver. The Tribunal grants a waiver of the balance amount pending compliance and stays the recovery until the appeal's disposal.

Overall, the judgment provides a detailed analysis of the service tax liability issues raised, emphasizing the importance of interpreting relevant circulars and establishing prima facie cases for waiver of amounts in dispute.