2013 (7) TMI 296 - AT - Service Tax

Stay application Whether the Service tax on the commission received from the foreign companies whose products are marketed would be liable to pay service tax on commissions received appellants received the amount in foreign exchange - promoting or procuring orders and also doing demonstration, installation and training the customers in India for the use of machinery as supplied by the foreign manufacturer - the question of discharge of service tax on the commission - Held that - strong prima facie case for the waiver of the pre-deposit of the amounts involved - Application for the waiver of pre-deposit of the amounts involved is allowed - recovery also stayed till the disposal of appeal as held in ABS India Ltd. (2008 (8) TMI 53 - CESTAT ) Application allowed.

Summary

Issues:
Stay petition for waiver of pre-deposit of service tax, penalty, and interest amounts. Interpretation of service tax liability on commissions received for promoting goods manufactured abroad and for selling own goods.

Analysis:
The appellant filed a stay petition seeking a waiver of pre-deposit for confirmed service tax liabilities, penalties, and interest amounts. The adjudicating authority confirmed the service tax liability on commissions received for promoting foreign-manufactured goods and selling own goods. The appellant had already deposited a portion of the demanded amount and contested the issue on merits. The appellant argued that previous tribunal decisions favored the assessee regarding service tax on commissions from foreign companies. The appellant contended that the Board's circular supported their position.

The Departmental Representative (D.R.) argued citing a tribunal decision regarding the export of services, claiming that even though the appellant received commissions in foreign exchange, the services provided were utilized in India. The D.R. emphasized the need for the appellant to deposit an amount for the appeal process based on the tribunal's decision in a similar case. After reviewing submissions and records, the Tribunal found the deposited amount sufficient to hear the appeal on the commission paid by the appellant.

Regarding the commission received by the appellant, it was established that the appellant only promoted foreign-manufactured products and received payments in foreign exchange. The Tribunal noted similarities with previous cases and relied on precedents favoring the assessee. The issue mirrored a previous case involving ABS India Ltd., and the Board's circular clarified the service tax liability situation.

The Tribunal rejected the D.R.'s reliance on a specific case, emphasizing that the appellant's activities aligned with the precedents and the Board's circular. The Tribunal concluded that the appellant presented a strong prima facie case for waiving the pre-deposit amounts. Consequently, the application for waiver was granted, and recovery stayed pending appeal, except for the amount already deposited by the appellant.