2013 (10) TMI 584 - AT - Service Tax

Waiver of pre deposit - Manpower recruitment or supply agency - reverse charnge - Held that - In view of consistent orders passed granting waiver of pre-deposit in aforesaid orders and the final order in Paramount Communication Ltd. 2013 (3) TMI 134 - CESTAT NEW DELHI , we see a strong prima facie case in favour of the petitioner in respect of the adjudicated tax liability under manpower recruitment or supply agency service as well - Decided in favour of assessee.

Summary

Issues Involved:
1. Assessment of service tax under three heads: reverse charge mechanism for manpower recruitment services, commission received for Business Auxiliary Services, and erroneous accounting of education cess.
2. Claim of immunity under Export of Service Rules, 2005 for Business Auxiliary Services.
3. Error in computation of education cess.
4. Reliance on interim and final orders for waiver of pre-deposit in the case of taxable service related to manpower recruitment or supply agency.
5. Granting of waiver of pre-deposit and stay of further proceedings pending appeal.

Analysis:

1. The judgment addresses the assessment of service tax under three heads: firstly, under a reverse charge mechanism for manpower recruitment services from overseas companies, secondly for commission received for providing Business Auxiliary Services, and thirdly for an alleged error in the computation of education cess. The total amount assessed was approximately Rs.6.5 crores.

2. Regarding the claim of immunity under the Export of Service Rules, 2005 for Business Auxiliary Services, the petitioner relied on a judgment in Paul Merchants Ltd. vs. C.C.E., Chandigarh. The Tribunal found prima facie merit in the petitioner's claim for immunity in this regard, specifically for the amounts of Rs.16,65,550/- and Rs.1,74,76,381/-.

3. The adjudication order was found to have an error in the computation of education cess, amounting to Rs.28,24,406. This error was noted and considered by the Tribunal in its analysis.

4. In the case of the taxable service related to manpower recruitment or supply agency, the petitioner relied on interim orders in appeals by various companies and a final order in Paramount Communication Ltd. The Tribunal observed a strong prima facie case in favor of the petitioner based on consistent orders granting waiver of pre-deposit in similar cases.

5. Consequently, the Tribunal granted a waiver of pre-deposit in full and stayed all further proceedings pending the disposal of the appeal. This decision was made based on the analysis of the various issues and claims presented by the petitioner. Additionally, a miscellaneous application was dismissed as it became infractuous due to the order passed in the stay application.