2010 (8) TMI 486 - HC - Service Tax

Demand - Business Auxiliary Services or Market Research Services - period of limitation - In the aforesaid view of the matter, looking to the consensus between the parties, the impugned order to the extent it directs pre-deposit of Rs. 35 lakh in relation to the Market Research Services is set aside - The Tribunal is directed to hear and decide the remanded proceeding with expeditious despatch, at any rate, within eight weeks from the date of receipt of copy of this order

Summary

Issues:
1. Waiver of service tax demand under "Business Auxiliary Services."
2. Applicability of service tax on "Market Research Services" with respect to the recipient being outside India.

Analysis:
1. The High Court examined the impugned order of the Tribunal concerning the waiver of service tax demand of Rs. 17.5 crore under "Business Auxiliary Services." The Tribunal had waived the demand on the grounds that it amounted to export, thus not warranting any service tax. The Court noted this finding and did not challenge it, leading to the appeal being taken up for final hearing with the consent of both parties.

2. Regarding "Market Research Services," the Tribunal had prima facie found that the extended period of limitation would apply, making it liable for service tax. The appellant contended that no service tax is payable if the recipient of the service is outside India. The Court observed that the Tribunal did not consider this aspect in the impugned order concerning Market Research Services. As a result, the Court set aside the direction for pre-deposit of Rs. 35 lakh related to Market Research Services and remitted the proceeding back to the Tribunal for fresh consideration. The Tribunal was directed to hear and decide the remanded proceeding expeditiously within eight weeks.

3. The Court disposed of the appeal in terms of the order, with no order as to costs. All rival contentions regarding Market Research Services were kept open for consideration during the fresh proceedings before the Tribunal. The judgment emphasized the need for expeditious handling of the remanded proceeding to ensure timely resolution of the matter.