2007 (4) TMI 93 - AT - Service Tax

Stay/dispensation of Pre deposit - Alleged that appellant providing the service of security service and accordingly demanded service tax along with interest and penalty on it - Held that as per agreement service recipient liable to pay service tax and accordingly pre-deposit of Rs 75, 000 ordered and balance waived off

Summary

Issues involved:
Interim stay of service tax demand, nature of services provided, challenge to penalty imposed, waiver of pre-deposit, compliance deadline.

Interim Stay of Service Tax Demand:
The appellant sought interim stay of the impugned order demanding service tax of Rs. 3,84,812/-, claiming that the services provided were in the nature of security service. The appellant argued that they only provided manpower to BSNL and if any security service was to be provided, it should be from DGR. However, the terms of the agreement clearly indicated that security services involving guards with guns were to be provided, along with manning of exchanges, offices, and operating the generator. BSNL confirmed in their reply that full payment for security services was made, as per the agreement dated 5-9-02. Therefore, the appellant failed to demonstrate a case for a total waiver of pre-deposit.

Nature of Services Provided:
The appellant contended that they provided only manpower to BSNL and did not offer security services. However, the terms of the agreement revealed that security services involving guards with guns were to be provided, in addition to manning exchanges, offices, and operating the generator. BSNL's response confirmed the provision of security services by the appellant, as stated in the agreement. The appellant's argument regarding the nature of services provided was contradicted by the agreement and BSNL's response.

Challenge to Penalty Imposed:
The penalty imposed was challenged by the appellant along with the demand for service tax. The appellant sought interim stay of the penalty as well. However, based on the agreement terms and BSNL's confirmation of payment for security services, the appellant's challenge to the penalty was not substantiated. The Tribunal considered the facts and circumstances of the case, including the involvement of operating the generator, before issuing a directive on the pre-deposit amount.

Waiver of Pre-Deposit:
Considering the facts and circumstances, the Tribunal directed the appellant to deposit Rs. 75,000 within six weeks for a waiver of the remaining amount of service tax and penalty during the appeal's pendency. Failure to comply with the deposit directive would result in the dismissal of the appeal. The Tribunal set a compliance reporting deadline for the deposit, ensuring a clear course of action for the appellant.

This detailed analysis of the judgment highlights the issues of interim stay of service tax demand, nature of services provided, challenge to penalty imposed, waiver of pre-deposit, and compliance deadline, providing a comprehensive understanding of the legal decision rendered by the Appellate Tribunal CESTAT, New Delhi.