2011 (4) TMI 822 - AT - Service Tax

Waiver of pre-deposit - service tax on courier charges received by the appellant from its customers - Held that - The appellant has made a strong prima-facie case against the demands on account of the finding that the appellant has deliberately not paid this tax due to the Department. Commercial Training or Coaching Services - Held that - The assessee has not been able to make out a prima-facie case against the order of the demand thus order pre-deposit of the same within four weeks and report compliance on 24/05/2011 before the Assistant Registrar of this Bench. Banking and other Financial Services (BOFS) - Held that - As regards the remaining amount of ₹ 1,07,867/-,satisfied that the activity involved related to service in respect of commodities excluded from the definition of Banking & Other financial services in sub-clause (v) of Section 65(12) - find from the CBEC Circular F.No.B.11/1/2001-TRU dt. 9/7/2011 that custodial depository services meant safe keeping of securities of a client and providing services incidental thereto. The demand is for having rendered depository participant services - Thus, stay application is allowed in part.

Summary

Issues:
1. Pre-deposit requirements for service tax, interest, and penalty.
2. Service tax demand on courier charges, Commercial Training or Coaching Services, and Banking and other Financial Services.
3. Prima facie case against the demands and waiver of pre-deposit.
4. Differentiation between depository participant services and custodial depository services.

Analysis:
1. The judgment addresses the requirement for the appellants to pre-deposit amounts including service tax, interest, and penalty. The service tax demand primarily consists of charges on courier services, Commercial Training or Coaching Services, and Banking and other Financial Services. The appellant contests the demand related to the activity as a depository participant from 2003-04 to 2005-06, which was later transferred to a sister concern. The audit department initially raised objections but later dropped them, leading to a dispute over the liability for service tax.

2. The appellant argues for a waiver of pre-deposit based on the legal stand taken by the Commissioner regarding the sister concern. The Tribunal considers the arguments and records presented, finding a strong prima facie case against the demands. Consequently, the waiver of pre-deposit and penalty is granted due to the appellant's alleged non-payment being deliberate. However, for the demand related to Commercial Training or Coaching Services, the appellant fails to establish a prima facie case, leading to an order for pre-deposit within a specified timeframe.

3. Regarding the demand for Banking and other Financial Services, the Tribunal delves into the definition of services excluded from this category, citing a CBEC Circular to differentiate between custodial depository services and depository participant services. It concludes that the demand pertains to the latter, implying a liability for the appellant. Consequently, the stay application is partially allowed based on the analysis and findings made during the proceedings.

4. The judgment provides a detailed analysis of the issues surrounding the pre-deposit requirements, service tax demands, and the differentiation between various financial services. It showcases the Tribunal's consideration of legal arguments, prima facie cases, and relevant circulars to arrive at a decision regarding the waiver of pre-deposit and the liability of the appellant for specific services rendered.