2011 (3) TMI 558 - AT - Service Tax

Waiver of pre-deposit - Prima facie the assessees have promoted or marketed insurance mediclaim policy of M/s. TATA AIG Insurance Co. and therefore have prima facie rendered Business Auxiliary Service - since assessees have admitted that they had made ground arrangement/accommodation site seeing etc. and these services are classifiable as Tour Operator Service prima facie delivery and handling of itinerary is part of tour operator service - Decided against the assessee by way of direction to deposit 25% of demand

Summary

Issues involved:
1. Demand of service tax on various services provided by the assessee.
2. Applications for waiver of pre-deposit of tax, interest, and penalty.
3. Classification of services as Business Auxiliary Service, Tour Operator Service, and Air Travel Agent's service.
4. Determination of the percentage of tax to be pre-deposited pending appeals.

Analysis:
1. The judgment involves the demand of service tax on different services provided by the assessee, including promoting insurance mediclaim policy, using software services, handling charges for itinerary, and income from cancellation of air tickets. The services were classified under Business Auxiliary Service, Tour Operator Service, and Air Travel Agent's service, falling under relevant sections of the Finance Act, 1994.

2. The appeal included applications for the waiver of pre-deposit of Rs. 2,38,393/- with interest and penalty for one appeal, and Rs. 19,258/- with interest and penalty for another appeal. The assessee sought a total waiver of tax, interest, and penalty, which was not granted by the tribunal based on the facts and circumstances of the case.

3. The tribunal found that the assessees had prima facie rendered Business Auxiliary Service by promoting insurance policies and using software services. Additionally, the handling of itinerary was considered part of Tour Operator Service, and income from ticket cancellations was deemed as Air Travel Agent's service. Consequently, the tribunal directed a pre-deposit of 25% of the service tax demand in each case within four weeks, with the balance tax, interest, and penalty waived pending the appeals.

4. The judgment specified that failure to comply with the pre-deposit directive would result in the vacation of stay and dismissal of appeals without prior notice. The compliance deadline was set for a specific date, and the operative part of the order was pronounced in open court on a different date.

This detailed analysis covers the issues of service tax demand, waiver of pre-deposit, service classification, and the tribunal's directive regarding the percentage of tax to be pre-deposited pending the appeals, as outlined in the judgment delivered by the Appellate Tribunal CESTAT, CHENNAI.