2010 (9) TMI 655 - AT - Service Tax

Waiver of Service Tax - Demand - Business Auxiliary Service - Bench was not required to go into the question as to whether booking the goods amounts to promotion of the business of a particular Airline/Shipping Line - pre-deposit of Rs. 2.5 lakhs within a period of four weeks from today and on such deposit, pre-deposit of the balance amounts in question shall stand waived and recovery thereof stayed pending the appeal - Failure to comply with this direction shall result in vacation of stay and dismissal of appeal without prior notice

Summary

Issues: Application for waiver of Service Tax and penalties for providing Business Auxiliary Service by booking goods through a specific Airline/Shipping Line.

In this judgment by the Appellate Tribunal CESTAT, CHENNAI, the issue revolved around an application for waiver of Service Tax and penalties amounting to approximately Rs. 5 lakhs due to the provision of Business Auxiliary Service by booking clients' goods through a particular Airline/Shipping Line. The Tribunal noted that the commission/incentive received from the Airline/Shipping Line was subject to tax under the category of 'Business Auxiliary Service'. The Tribunal considered the argument put forth by the assessees for total waiver but found that prima facie, the booking on a specific Airline/Shipping Line itself promoted the business of that particular entity. The Tribunal referenced previous cases like Euro RSCG Advertising Ltd. v. CCE and McCann Erickson (India) Pvt. Ltd. v. CCE, where the services were treated as 'advertising agency service', distinguishing them from the current case where the question of whether booking goods amounted to promotion of a specific Airline/Shipping Line's business was at hand.

The Tribunal, after considering the facts and circumstances, directed the assessees to make a pre-deposit of Rs. 2.5 lakhs within four weeks. Upon this deposit, the pre-deposit of the remaining amounts in question would be waived, and the recovery stayed pending the appeal. The Tribunal explicitly warned that failure to comply with this directive would lead to the vacation of the stay and dismissal of the appeal without prior notice. The judgment concluded by setting a deadline for compliance reporting, emphasizing the importance of adhering to the Tribunal's directions to avoid adverse consequences.