2011 (2) TMI 633 - AT - Service Tax

waiver of pre-deposit - courier agents - as per Board Circular for the year 1996 the applicants are not liable to pay service tax on the services provided to another courier service on principal to principal basis and Revenue is seeking service tax under business auxiliary service on these services which is not covered by definition of business auxiliary service - the services rendered by the applicants to another courier service on principal-to-principal basis is not covered during the relevant period under business auxiliary service and we are also convinced with the arguments of the learned Advocate supported by Chartered Accountant s Certificate showing the details of foreign remittances - Decided in favor of the assessee

Summary

Issues:
1. Waiver of pre-deposit of service tax confirmed by adjudication order for courier agents.
2. Service tax demand on services provided to other courier agents and non-receipt of remittance in foreign exchange for export consignments.

Analysis:
1. The judgment pertains to courier agents seeking a waiver of pre-deposit of service tax confirmed by an adjudication order on two grounds. Firstly, the demand is related to services provided to other courier agents as co-loaders. Secondly, it involves services rendered for export consignments where remittance in foreign exchange was allegedly not received.

2. The advocate for the applicants argued that as per a 1996 Board Circular, the services provided to other courier services on a principal-to-principal basis are not liable for service tax under business auxiliary service. The Revenue sought service tax under business auxiliary service, which was contended to be not covered by the definition. Additionally, regarding the non-receipt of remittances in foreign exchange, a certificate from a Chartered Accountant was presented, indicating that the remittances were adjusted against payments due from foreign clients in foreign exchange. It was also highlighted that during a specific period, there was no obligation to receive remittances in foreign exchange from foreign clients.

3. After hearing the submissions, the Tribunal found that the services provided by the applicants to other courier services on a principal-to-principal basis were not covered under business auxiliary service during the relevant period. The arguments presented by the advocate, supported by the Chartered Accountant's certificate detailing foreign remittances, were found convincing. Consequently, the Tribunal concluded that the applicants had a strong case in their favor. Therefore, the Tribunal granted a waiver of pre-deposit for the entire service tax, interest, and penalty, and also stayed the recovery during the pendency of the appeal.