2011 (1) TMI 734 - AT - Service Tax

Waiver of pre-deposit - Service tax liability on the amount of discount/ trade discounts/ commission given by the appellant to PCO Operators - Since, there is no dispute as to the fact that the appellant has discharged the service tax on the amount collected from the PCO operators - This fact needs to be taken into consideration for the valuation of taxable services - Also find that Board s circular No.23/3/97-ST dt. 13/10/1997 and the decision of the co-ordinate Bench in the case of Bharti Infotel Ltd. Vs. CCE, Bhopal 2005 -TMI - 264 - CESTAT, New Delhi , prima-facie cover the issue in favour of the assessee - Prima-facie for the waiver of pre-deposit of the amounts - Decided in favour of assessee.

Summary

Issues:
1. Service tax liability on discount/trade discounts/commission given by the appellant to PCO Operators.

Analysis:
The case involved a stay petition for the waiver of pre-deposit of specific amounts related to service tax, interest, and penalties. The main issue revolved around the service tax liability concerning the discounts, trade discounts, and commission provided by the appellant to PCO Operators. The appellant argued that they collected the entire bill amount from PCO operators and discharged the service tax liability, subsequently passing on 30% as commission. They highlighted the change in billing method post-March 2008, emphasizing the applicability of Section 67(1) of the Finance Act, 1994, and relevant Service Tax Rules. The appellant also cited Board circulars and previous judicial decisions to support their stance.

The Joint Commissioner of Central Excise and Customs contended that the business arrangement included the cost of free calls provided to PCO operators in the calculation of amounts to be collected, falling under Section 67(1) of the Finance Act, 1994. After considering both parties' submissions and examining the records, the Tribunal noted that the appellant had indeed paid service tax on amounts collected from PCO operators. They acknowledged the relevance of the Board's circular and previous judicial decisions favoring the appellant's position. Consequently, the Tribunal found merit in the appellant's case for the waiver of pre-deposit, staying the recovery of the amounts in question until the appeal's final disposal.