2013 (5) TMI 937 - AT - Service Tax

Summary

Issues:
The issues involved in this case are the waiver and stay against the demanded amount of service tax and education cesses for the period from April 2004 - March 2009, with specific breakdowns for different categories like Management Consultancy, Manpower Recruitment or Supply Agency, Airport Service, and CENVAT credit.

Management Consultancy Service:
The appellant, a company involved in developing and operating an international airport, faced a demand for service tax on payments made to foreign promoters/shareholders for various services. The demand was under the reverse charge mechanism. The appellant claimed a prima facie case against the demand, particularly regarding the remuneration paid to employees of the Swiss company. The Tribunal found a prima facie case in favor of the appellant as the demand was not sustainable on facts or in law.

Airport Service Demand:
Another significant demand was related to 'airport service' for the period from 2005-06 to 2008-09. The demand was on tender fees and pre-award costs collected from unsuccessful bidders, which were non-refundable as per tender conditions. The appellant argued that these fees were not collected as consideration for any service, making the demand unsustainable. The Tribunal agreed with the appellant's arguments and found a prima facie case in their favor.

Legal Consultancy Demand:
A demand of &8377; 24,11,025/- included legal consultancy services that became taxable only from a specific date. The demand also covered reimbursements made to the Swiss company for bonuses paid to employees. The appellant contended that certain portions of the demand were prior to the introduction of relevant legal provisions, making them unsustainable. The Tribunal favored the appellant's arguments, citing precedents to support their case.

Expenses Reimbursement Demand:
The demand of &8377; 17,15,138/- was related to reimbursements made to foreign companies/promoters for expenses incurred in the airport project. The appellant argued that the demand was prior to the enactment of specific legal provisions and that such reimbursements were not taxable before a certain date. The Tribunal found a prima facie case in favor of the appellant.

CENVAT Credit Issue:
There was no significant debate on the CENVAT credit issue in this case.

Conclusion:
Ultimately, the Tribunal granted a waiver of pre-deposit and stay of recovery against the outstanding dues adjudged against the appellant, considering the prima facie cases made by the appellant in various aspects of the demands raised against them.