2013 (10) TMI 484 - AT - Service Tax

Waiver of pre deposit - Whether the appellant is liable to service tax as the recipient of online information and data base access or retrieval service from a foreign based CRS service provider u/s 66A - Held that - since there are conflicting views of different Benches of this Tribunal in respect of same subject matter as applicable to the assessee before it, an arguable case was presented and the Tribunal should have exercised its discretion appropriately, by considering the application for waiver of pre-deposit. petitioner/assessee s contention that the petitioner should not have been called upon to deposit a huge amount as a condition precedent for the hearing of the appeal, in the circumstances, is well founded and this conclusion is fortified by the earlier decisions as well - Following decision of Binani Zinc Ltd. Vs. Asstt. Collector of Central Excise, Cochin 1994 (10) TMI 74 - HIGH COURT OF KERALA AT ERNAKULAM - stay granted.

Summary

Issues:
1. Liability of the appellant for service tax as a recipient of online information and data base access or retrieval service from a foreign CRS service provider under Section 66A of the Finance Act, 1994.
2. Conflict of opinion regarding the liability of other appellants under Section 66A of the Act.
3. Consideration of waiver of pre-deposit based on conflicting opinions and previous judgments.

Issue 1: Liability for Service Tax
The main issue in this judgment revolves around the liability of the appellant for service tax as a recipient of online information and data base access or retrieval service from a foreign CRS service provider under Section 66A of the Finance Act, 1994. The adjudication order concluded that the appellant is liable for service tax, prompting the appeal. This issue also arose for other appellants, including Thai Airways, Austrian Airways, and British Airways, leading to conflicting opinions among the members of the Division Bench. The Judicial Member opined that the appellants are liable as recipients of the taxable service, while the Member (Technical) held the contrary view. The conflict was referred to a third Member for resolution.

Issue 2: Conflict of Opinion
The judgment highlights the conflict of opinion within the Division Bench regarding the liability of the appellants under Section 66A of the Act. Separate orders were issued for Thai Airways and Austrian Airways, with conflicting opinions between the Judicial Member and the Member (Technical). The same conflict persisted in the case of British Airways, leading to the matter being referred to a third Member for resolution. The existence of conflicting opinions among the members of the Division Bench raised concerns and necessitated further review and resolution to ensure consistency in decisions.

Issue 3: Waiver of Pre-Deposit
The judgment also addresses the issue of waiver of pre-deposit based on the conflicting opinions and previous judgments, particularly referencing the Binani Zinc Ltd. case. The counsel for the petitioner/assessee argued for waiver of pre-deposit, citing the conflicting opinions in cases involving other airlines. The Tribunal, considering the strong prima facie case in favor of the assessee/petitioner due to conflicting opinions, granted waiver of pre-deposit of the adjudicated liability pending the appeal's disposal. The appeal was scheduled for hearing, with parties allowed to request expedited proceedings once the conflicts in other cases were resolved.

This detailed judgment from the Appellate Tribunal CESTAT NEW DELHI delves into the complex issues surrounding the liability of appellants for service tax, conflicting opinions within the Division Bench, and the grant of waiver of pre-deposit based on previous judgments and the presence of strong prima facie cases. The reference to previous cases and the need for resolution of conflicting opinions underscore the importance of consistency and clarity in legal decisions to ensure fairness and adherence to legal principles.