2007 (3) TMI 81 - AT - Service Tax

Telephone Service - Applicant claims the benefit exemption between the period when notification was rescinded and it is restored - Held that this is not fit case for full waiver of dues

Summary

Issues:
1. Interpretation of Notification No. 6/99 dated 9-4-99 for service tax exemption.
2. Impact of rescinded and restored notifications on benefit eligibility.
3. Application of extended time limit for benefit claim.
4. Consideration of Circular of CBEC No. 90/1/2007 on taxability of services.
5. Determination of waiver of dues and deposit amount.

Analysis:
1. The case involved the interpretation of Notification No. 6/99 dated 9-4-99, providing service tax exemption for taxable services paid in convertible foreign exchange. The applicant rendered services to foreign mobile operators' subscribers and received payments in foreign exchange, claiming the exemption under this notification.

2. Notification No. 6/99 was rescinded by Notification No. 2/2003 but later restored by Notification No. 21/03. The applicant sought exemption for the intervening period, which was prima facie not available. The tribunal noted the restoration of the notification but found the applicant ineligible for exemption during the rescinded period.

3. The applicant argued against the invocation of the extended time limit for benefit claim, contending that their reasons were not acceptable. The tribunal considered the arguments and found that the applicant's case did not warrant full waiver of dues as per the Order-in-Original.

4. The applicant relied on Circular of CBEC No. 90/1/2007, indicating an examination of taxability on international in-bound roamer services. However, the circular did not grant immediate benefit, leading the tribunal to uphold the Commissioner (Appeals) order, which was deemed justified in the absence of clear benefit provision.

5. Consequently, the tribunal directed the applicant to deposit a sum of Rs. 10 lakhs within 8 weeks, failing which the appeal would stand dismissed. Upon deposit, there would be a waiver of the balance amount of duty demand and penalty imposed. The appeal was scheduled for compliance reporting on 22nd May, 2007, and the application was disposed of accordingly.