2013 (8) TMI 639 - AT - Service Tax

Service tax demand rent a cab services export of services - secondary service which are used by the primary service provider - Held that - The appellant not to be liable to pay service tax on rent-a-cab services provided by them to various IT companies they have exported their services - in view of the clarification issued by the Board vide Circular dated 25/04/2003, the service provided by the primary service provider are exported. Stay application - unconditional waiver from pre-deposit granted and stay granted to recovery to the appellant.

Summary

Issues:
- Liability to pay service tax on transportation services provided to 100% EOU
- Applicability of Circular No. 56/5/2003 for exemption from service tax
- Consideration of certificates from primary service providers for export of services
- Grant of stay on recovery of dues during appeal

Liability to pay service tax on transportation services provided to 100% EOU:
The case involved an appeal and stay application against an order demanding service tax on transportation services provided by M/s. Super Shuttle to various 100% EOUs. The department contended that the services fell under the category of rent-a-cab services, leading to a substantial service tax demand. The appellant challenged this demand, leading to the appeal before the Tribunal.

Applicability of Circular No. 56/5/2003 for exemption from service tax:
The appellant relied on Circular No. 56/5/2003 issued by the CBEC, which clarified that secondary services used by primary service providers for exporting services would not be liable to service tax, provided the primary services were exported. The appellant argued that the transportation services provided to 100% EOUs were utilized for exporting services by primary service providers, as evidenced by certificates from various agencies. The appellant contended that the adjudicating authority failed to consider these submissions, warranting a grant of stay.

Consideration of certificates from primary service providers for export of services:
Certificates from entities such as M/s. TCS Ltd., M/s. Intelenet Global Services Ltd., and others were presented to demonstrate that the transportation services were utilized for exporting services by primary service providers. The appellant emphasized that the primary services were indeed exported, aligning with the conditions specified in the Circular for exemption from service tax. The Tribunal noted the lack of consideration given to these certificates by the adjudicating authority, highlighting a potential oversight in the original decision.

Grant of stay on recovery of dues during appeal:
After careful consideration of submissions from both parties, the Tribunal observed that the appellant had prima facie made a case for exemption from service tax based on the Circular. Consequently, the Tribunal granted an unconditional waiver from the pre-deposit of dues and stayed the recovery of the adjudged amount during the pendency of the appeal. This decision was influenced by the interpretation of the Circular and the evidence presented regarding the utilization of transportation services for exporting services by primary service providers.