2013 (2) TMI 76 - AT - Service Tax

Waiver of pre-deposit - Denial of input service credit - Assessee engaged in the activity of sale of electronic goods - attending complaints for repair and maintenance and warranty period complaints and are also involved in erection and commissioning activities of DTH - Held that - In respect of activity of sale at the showroom is not a service. Therefore the applicants are not entitled for input service credit. The activity of erection and commissioning of the electrical equipments as well as attending to the complaints of customers during the warranty period and in some of the cases, they are receiving the faulty equipments at their showrooms and the same are being sent to the service centres for repair and on that count, they are rendering certain service, for which they are entitled to input service credit. Pre-deposit partly waived.

Summary

Issues:
- Whether the applicants are entitled to waiver of pre-deposit of the entire amount of service tax, interest, and penalties confirmed against them.
- Whether the applicants are eligible for input service credit due to their involvement in various activities related to the sale of electronic goods.

Analysis:
1. The applicants sought a waiver of pre-deposit of the entire amount of service tax, interest, and penalties confirmed against them. They argued that they should be entitled to input service credit as they are involved in activities such as attending complaints for repair and maintenance, warranty period complaints, and erection and commissioning activities of DTH. They claimed that a 2011 Explanation stating that trading activity is an 'exempted service' led them to believe they were eligible for credit. The tribunal noted that the activity of sale at the showroom is not a service, but considering the additional services provided by the applicants, they directed the applicants to make a pre-deposit of 70% of the denied input service credit within 8 weeks. The balance amount would be waived upon compliance, and recovery stayed during the appeal process.

2. The tribunal acknowledged that while the primary activity of sale at the showroom is not considered a service, the applicants were involved in other activities like erection and commissioning of electrical equipment, attending customer complaints during the warranty period, and arranging repairs for faulty equipment. These additional services rendered by the applicants were deemed eligible for input service credit. The tribunal directed the applicants to make a pre-deposit of 70% of the denied input service credit within a specified timeframe, with the remaining amount being waived upon compliance. The recovery of the waived amount was stayed during the pendency of the appeals, providing relief to the applicants during the legal process.

3. A miscellaneous application was filed by the Revenue seeking a change in the cause title from "Commissioner of Central Excise, Chennai-III" to "Commissioner of Service Tax, Chennai." The tribunal allowed the miscellaneous application, approving the requested change in the cause title to accurately reflect the respondent as "Commissioner of Service Tax, Chennai." This administrative adjustment ensured clarity and accuracy in the legal proceedings related to the case, maintaining proper identification of the involved parties in the documentation and records.