2009 (7) TMI 826 - AT - Service Tax

Waiver of predeposit - Tribunal has granted stay in respect of the case where the department sought to levy service tax on Professional Services rendered by the chartered accountants under the category Management Consultancy Services in the case of M/s. S.B. Billimoria & Co. v. CCE, Chennai (Appeal No. S/99/2005) (2006 -TMI - 423 - Appellate Tribunal, Chennai) - held that the requirement of pre-deposit are waived and stay the recovery during the pendency of the appeal

Summary

Issues:
Demand of service tax on legal services under the category "Management Consultant" for the period from October, 02 to March, 06.

Analysis:
The appellants contested the demand of Rs. 66,53,315/-, interest, and a penalty imposed by the adjudicating Commissioner for the period in dispute. The senior counsel for the appellants argued that they are not liable to pay tax on legal services under the category of "Management Consultant." During the disputed period, the appellants paid taxes on various services such as General Management Consultancy Services, ERP Implementation Services, and Internal Audit Services. The appellants also provided professional services akin to legal services, including direct and indirect tax compliance, representation services, and giving opinions on tax implications. The senior counsel highlighted that the definition of "Management Consultant" during the disputed period did not encompass services involving legal opinions and assistance before statutory authorities. Reference was made to a Board's Circular and a previous Tribunal's stay order in a similar case involving professional services rendered by chartered accountants. Additionally, it was noted that the Commissioner of Service Tax, Kolkata, had ruled in favor of the appellants in a previous case. The senior counsel argued against the applicability of a larger period of limitation due to the absence of suppression or wilful misstatement.

The JCDR did not raise significant objections to the waiver of pre-deposit requested by the appellants. Considering the arguments presented and the previous Tribunal's decision, the Tribunal decided to waive the requirement of pre-deposit. The Tribunal found that the appellants had established a prima facie case in their favor both on merit and limitation. Consequently, the recovery was stayed during the pendency of the appeal. The operative part of the order was pronounced in open court on 28-7-2009.