2011 (5) TMI 617 - AT - Service Tax

Waiver of the pre-deposit - amount collected as reimbursable should not be included in the valuation - Held that - As the appellant has already deposited an amount of Rs.25,72,676/- and as the issue is an arguable one requiring a detailed analysis of the provisions of the Service Tax (Deduction of Value) Rules, 2008 the appellant directed to further deposit an amount of Rs.15,00,000/- within a period of four weeks from today and report compliance.

Summary

Issues Involved:
Waiver of pre-deposit of Service Tax, penalties, and interest under various sections of the Finance Act, 1994 based on the appellant's claim of acting as a pure agent and seeking deduction from the value of taxable services.

Analysis:

Issue 1: Pre-deposit of Service Tax, Penalties, and Interest
The appellant filed a stay petition seeking a waiver of pre-deposit of Service Tax amounting to Rs.82,20,813 under Section 73(2) of the Finance Act, 1994, along with appropriate interest under Section 75, penalties under Sections 76 and 78. The Adjudicating Authority confirmed these amounts for the period April 2006 to September 2007 due to the appellant's alleged failure to discharge the Service Tax liability on the total received amount. The Tribunal, after hearing both sides and examining the records, noted the appellant's argument that certain amounts were reimbursable and should not be included in the valuation of taxable services as they were acting as a pure agent. The Tribunal found this issue required a detailed analysis of the Service Tax (Deduction of Value) Rules, 2008, which could only be done at the final disposal of the appeal.

Issue 2: Direction for Further Deposit
Considering the appellant had already deposited Rs.25,72,676 and the issue was debatable, the Tribunal directed the appellant to deposit an additional amount of Rs.15,00,000 within four weeks and report compliance by a specified date. Upon compliance, the condition of pre-deposit for the remaining amounts was waived, and the recovery stayed until the appeal's final disposal.

In conclusion, the Tribunal granted a partial waiver of the pre-deposit requirement, subject to the appellant's compliance with the additional deposit directive. The decision highlighted the need for a detailed examination of the appellant's claim regarding the reimbursable amounts and their exclusion from the taxable service valuation, emphasizing the importance of addressing such complex issues at the final disposal stage.