2010 (4) TMI 646 - AT - Service Tax

Waiver of pre-deposit Business Auxiliary Service promotional activity - Adjudicating Authority had taken into consideration the judicial pronouncements in respect of category of services provided and came to the conclusion that the appellant provided business auxiliary services - appellant has already made deposit of Rs. 10 crores - waiver of pre-deposit of balance demand

Summary

Issues:
1. Determination of liability for service tax demand for business auxiliary services provided.
2. Assessment of penalty under various sections of the Finance Act, 1994.
3. Admissibility of CENVAT credit on input services.
4. Eligibility for time bar benefit.
5. Taxability of reimbursement of expenses.
6. Levying of penalties under different provisions of the law.

Analysis:
1. The Adjudicating Authority examined the agreement between the appellant and a non-banking company to determine if taxable services were provided. The Authority framed issues regarding the provision of business auxiliary services, suppression of facts, commission received, CENVAT credit, and penalties under different sections of the Finance Act, 1994. The Authority concluded that the appellant provided business auxiliary services and upheld the tax liability.

2. The Authority found that the revenue was kept in the dark due to suppression of facts by the appellant, justifying the application of the extended limitation period for tax liability. The issue of cum-service tax was also addressed, allowing a benefit to re-calculate the tax liability.

3. Regarding CENVAT credit, the Authority held that since the appellant did not seek registration under the Finance Act, 1994, they were not eligible for the credit. Lack of evidence and compliance led to the denial of CENVAT credit benefits.

4. The claim of reimbursement of expenses not liable to tax was rejected due to the absence of supporting documentation, resulting in the inclusion of the claim as part of taxable services.

5. Penalties were deemed leviable by the Authority under various provisions of the Finance Act, 1994, based on a thorough examination of the issue.

6. The appellant presented arguments challenging the tax liability, citing legal definitions and judgments. The Revenue contended that the appellant provided business auxiliary services based on an agreement and suppressed facts were uncovered during investigation, justifying the tax liability. The Tribunal directed the appellant to make an additional deposit for the appeal to be heard, considering various factors and interests at play.

This detailed analysis covers the various issues addressed in the judgment, providing insights into the legal reasoning and conclusions drawn by the Adjudicating Authority and the Tribunal.