2011 (5) TMI 814 - AT - Service Tax

Application for waiver of pre-deposit of service tax Held that - services appear to have a nexus with the business activity of the assessees as the annual maintenance contract is used for maintenance of computers, air conditioners etc.; pest control services are for keeping the office and factory free from insects, mosquitoes etc.; the taxi services have been used in relation to inland travel arrangements of company personnel; ticket booking services is for foreign travel of officers of the company in connection with business, namely, exports of their goods; transport services has been engaged for transport/travel of the company personnel insurance/risk policy covers showrooms, garages, and workshops and the amount spent towards delegation and convention services are for business activities and for holding business conventions, auctioning services have no nexus with the activity of business of the assessee-company

Summary

Issues: Application for waiver of pre-deposit of service tax on various services such as taxi services, ticket booking services, transport services, insurance/risk policy, pest control service, annual maintenance contract, auctioning services, and delegation and convention services.

Analysis:
1. Nature of Services: The judgment addresses the issue of denial of service tax credit on various services utilized by the assessee, including taxi services, ticket booking services, transport services, insurance/risk policy, pest control service, annual maintenance contract, auctioning services, and delegation and convention services.

2. Nexus with Business Activity: The Tribunal observes that, except for auctioning services related to the clearance of unwanted goods, the other services demonstrate a clear nexus with the business activities of the assessee. For instance, the annual maintenance contract is essential for maintaining office equipment, taxi services are used for inland travel arrangements, ticket booking services facilitate foreign travel for business purposes, and insurance/risk policy covers essential business premises.

3. Pre-Deposit Directive: The judgment directs a pre-deposit of Rs. 3 lakhs concerning the auctioning services due to the lack of nexus with the business activity. The assessee is required to comply with this directive within four weeks, failing which the stay on recovery will be vacated, and the appeal may be dismissed without prior notice. However, on depositing this amount, the pre-deposit of the remaining disputed balance will be dispensed with, and recovery will be stayed pending the appeal.

4. Compliance Reporting: The judgment sets a deadline for compliance reporting on 22-7-2011, emphasizing the importance of adhering to the pre-deposit directive to maintain the stay on recovery pending the appeal process.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Chennai highlights the considerations made regarding the various services in question, the nexus with business activities, the pre-deposit directive, and the importance of compliance within the specified timeline to ensure the continuation of the appeal process.