2013 (11) TMI 760 - AT - Service Tax

Waiver of pre deposit - Consultant Engineering Service - Held that - applicants have not produced documentary evidence for the reimbursable expenses. Upon pre-deposit of balance amount of tax, along with interest and penalty shall stand waived and recovery thereof stayed during pendency of appeal - Prima facie case not in favour of assessee - Stay partly granted.

Summary

Issues:
Waiver of predeposit of tax for reimbursable expenses in Consultant Engineering Service.

Analysis:
The applicant sought waiver of predeposit of tax amounting to Rs.4,66,169/- along with interest and penalty related to their provision of 'Consultant Engineering Service'. The tax was upheld due to certain expenses not being included while providing services. The applicant argued that reimbursable expenses should not be part of the taxable value, citing a decision from the Delhi High Court. The advocate highlighted that a sum of Rs.15,778/- was paid, as evident from the adjudication order.

The respondent contended that the applicant failed to provide documentary evidence to support the classification of expenses as reimbursable. Additionally, it was argued that the applicant did not qualify as a service provider acting as a pure agent. Upon review, it was noted that the applicants did not furnish documentary evidence for the reimbursable expenses. The advocate's claim of producing invoices to be examined during the appeal hearing was acknowledged. The applicant had already deposited Rs.15,778/-. Consequently, the tribunal directed the applicant to deposit Rs.50,000/- within six weeks. Upon this deposit, the pre-deposit of the remaining tax amount, interest, and penalty would be waived, and recovery stayed during the appeal process. Compliance was to be reported by a specified date.