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2013 (12) TMI 960 - AT - Service TaxDemand of service tax - Business Support Service - Held that - present demand of service tax is under Section 66A of the Finance Act, 1994 (reverse charge mechanism). If that be so, there is a revenue-neutral situation - In this scenario, there will be waiver of pre-deposit and stay of recovery in respect of the adjudged dues - Stay granted.
Issues: Delay in Department's appeal, Stay application by the assessee regarding service tax demand.
Delay in Department's appeal: The judgment addresses the delay in the Department's appeal, which was delayed by two days. The Tribunal, after hearing both sides, decided to condone this delay and allowed the COD application. Stay application by the assessee regarding service tax demand: The assessee filed an appeal against an impugned order, seeking waiver of pre-deposit and stay of recovery concerning a demand of service tax amounting to over Rs. 3.37 crores, along with interest and penalties under the Finance Act, 1994. The service tax demand was related to Business Support Service (BSS) for the period May 2006 to May 2009, involving a transaction with a foreign company. The appellant claimed a prima facie case on merits based on a judgment of the Karnataka High Court. It was argued that any service tax paid for the transaction with the foreign company could be utilized as CENVAT credit for payment of service tax on their domestic output service. The Department acknowledged that the demand was under Section 66A of the Finance Act, 1994, involving a reverse charge mechanism, leading to a revenue-neutral situation. Consequently, the Tribunal decided on the waiver of pre-deposit and stay of recovery for the adjudged dues. This detailed analysis of the judgment highlights the issues of delay in the Department's appeal and the stay application by the assessee regarding the service tax demand. The Tribunal's decision to condone the delay and allow the COD application, along with granting waiver of pre-deposit and stay of recovery for the service tax demand, showcases the legal intricacies and considerations involved in this case.
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