2010 (12) TMI 1184 - AT - Service Tax

Summary

Issues involved: Stay petition for waiver of pre-deposit of Service Tax amount, interest u/s 75, and penalty u/s 78 for the period February 2002 to February 2007.

Service Tax Liability: The demand arose as the applicant did not discharge the Service Tax liability on tax deducted at source paid by NHAI on their behalf. The appellant argued that the tax deducted at source by NHAI should not be considered as amount received for services rendered. The JCDR contended that the income tax paid by NHAI was part of the consideration for services rendered, citing contractual clauses and Service Tax FAQ. Various decisions were referred to in support of both arguments.

Decision: The Tribunal found the includability of income tax paid by NHAI in the gross amount to be a debatable issue. It was noted that the applicant had already paid Service Tax on the billed amount for services rendered. Considering the debatable nature of the issue, the Tribunal stayed the recovery of the amounts involved until the final disposal of the appeal, ruling in favor of the applicant for the waiver of pre-deposit.