2010 (11) TMI 509 - AT - Service Tax

Demand - Banking & Financial Services and Management and Maintenance or Repair Services - It is the submission that the appellant had paid the sales tax/VAT as deemed sale of the goods and hence the question of discharge of Service Tax liability does not arise as the said clarification clearly holds that once supply of tangible goods for use and VAT/sales tax had been paid, it would not come in the scope of service tax liability on supply of tangible goods service - In the definition it would mean that banking and financial services to include financial leasing services including equipment leasing and hire-purchase - appellant has not made out prima facie case for the complete waiver of pre-deposit of the amounts confirmed by the adjudicating authority - Decided against the assessee by way of direction to deposit Rs. 10 Lakhs

Summary

Issues:
- Stay petition for waiver of pre-deposit of service tax amounts on Banking Services, Maintenance and Repair Services, Storage and Warehousing charges, interest, and penalty.
- Taxability of services provided by the appellant in the form of Banking and Financial Services, Management, Maintenance and Repair Services, and Storage & Warehousing Services.
- Interpretation of the definition of Banking and Other Finance Services under Section 65(12) of the Finance Act, 1994.
- Prima facie case for waiver of pre-deposit of confirmed amounts by the adjudicating authority.

Analysis:
1. The appellant filed a stay petition seeking a waiver of pre-deposit of various service tax amounts, interest, and penalty. The demand arose due to the appellant's alleged failure to pay service tax on services provided, including Banking and Financial Services, Management, Maintenance and Repair Services, and Storage & Warehousing Services during a specific period.

2. The adjudicating authority concluded that the appellant had provided the mentioned services, leading to the demand for service tax. The majority of the demand was related to Banking & Financial Services and Management and Maintenance or Repair Services.

3. The appellant argued that they were manufacturers of special purpose tanks, leasing them to clients, and had paid sales tax/VAT for the deemed sale of goods. They contended that the Departmental clarification exempted them from service tax liability on supply of tangible goods services.

4. The Jt. CDR argued that the appellant fell under the definition of Banking and Other Finance Services, making them liable for service tax. He also asserted that Management, Maintenance, or Repair Services covered the operation of the plant, justifying the service tax demand.

5. The Tribunal analyzed the agreement between the appellant and clients for equipment leasing. It noted that the appellant managed the plant's oxygen production, paying Central Excise duty on the produced oxygen. The Tribunal found the issue complex, requiring detailed examination of the services' taxability based on the definitions provided.

6. Ultimately, the Tribunal found that the appellant failed to establish a prima facie case for complete waiver of the pre-deposit amounts. They directed the appellant to deposit a specified sum and report compliance, allowing a partial waiver of pre-deposit and staying recovery until the appeal's disposal.

7. The Tribunal linked the current appeal with another filed by the appellant for joint disposal. The judgment was pronounced on 29-11-2010 by the Members of the Tribunal, emphasizing the need for detailed examination of the taxability issues raised by the appellant.