2010 (9) TMI 653 - AT - Service Tax

Waive pre-deposit - Support services of business or Commerce or Business Auxiliary Services - strong prima facie case for waiver in the light of the Tribunal s decision in the case of Fifth Avenue v. Commissioner of Service Tax, Chennai (2009 -TMI - 34611 - CESTAT, CHENNAI), where the services rendered by the assessees were in the form of evaluation of prospective customers, processing of purchase orders, customer management, processing of transactions, information and tracking of delivery schedules, operational assistance for marketing, formulation of customer service and pricing policies, managing distribution and logistics, which were held by the Tribunal to be support services of business or commerce and not covered as BAS - Held that waive pre-deposit of amounts by accepting, prima facie, that the applicants provided support services of business or commerce which came into the statute only with effect from 1-5-2006 and stay recovery

Summary

Issues: Application for waiver of pre-deposit of service tax for Business Auxiliary Services (BAS) provided to foreign customers.

The judgment by the Appellate Tribunal CESTAT, CHENNAI, involved the consideration of an application for waiver of pre-deposit of service tax amounting to Rs. 93,60,126/- along with interest and penalty of Rs. 94 lakhs. The demand arose from the provision of Business Auxiliary Services (BAS) to foreign customers. The Tribunal noted that the assessees had already paid an admitted liability of Rs. 2,55,615/- for the period subsequent to the introduction of Section 66A in the Finance Act, 1994. The Tribunal found that the assessees had made a strong prima facie case for waiver based on a previous decision in the case of Fifth Avenue and Fifth Avenue Wind Mills Pvt. Ltd. v. Commissioner of Service Tax, Chennai, where similar services were considered support services of business or commerce and not covered under BAS. As the services provided by the present applicants were deemed somewhat identical to those in the cited case, the Tribunal decided to waive the pre-deposit amount, accepting that the applicants provided support services of business or commerce which came under the statute only from 1-5-2006, staying the recovery during the appeal process. The order was pronounced in open court by Jyoti Balasundaram, Vice-President of the Tribunal.