2013 (12) TMI 1017 - AT - Service Tax

Waiver of pre-deposit of service tax - Commercial training or coaching centre service - Liability to pay service tax in respect of computer training as per Notification No.9/2003-ST - Denial of benefit of Notification No.9/2003-ST - Held that - even after making the adjustment of cenvat credit availed in respect of the services which are utilised by the branches and after allowing the benefit of the Notification which is in respect of computer training, there is still a short payment of Rs.37 lakhs - total demand of Rs.20 lakhs on account of the taxable services received from foreign service provider and the applicants are admitting that the applicants had received such services. In view of this, the applicants have not made out a case for total waiver of service tax - Conditional stay granted.

Summary

Issues:
1. Waiver of pre-deposit of service tax, interest, and penalties.
2. Disallowance of cenvat credit by the Revenue.
3. Denial of benefit of Notification No.9/2003-ST for computer training.
4. Short payment of service tax and adjustment of cenvat credit.
5. Demand on reverse charge mechanism for management consultancy service and intellectual property rights.
6. Liability for services received from foreign service provider.

Analysis:

1. The applicant sought a waiver of pre-deposit of service tax, interest, and penalties amounting to Rs.7,26,41,714. The demand was primarily for providing commercial training or coaching center services from July 2003 to March 2009.

2. The Revenue disallowed cenvat credit availed by the applicant at the head office for services utilized by branches, arguing that the head office was not registered as an Input Service Distributor (ISD). The applicant contended that the head office was discharging tax liabilities for branches and had already paid service tax with interest.

3. The applicant argued that they were not liable to pay service tax for computer training during a specific period as per Notification No.9/2003-ST. The benefit of the notification was denied due to the lack of certificate issuance for the training provided.

4. Despite adjustments made for cenvat credit and the benefit of the notification, a short payment of Rs.37 lakhs was identified. The applicant claimed to have already paid this amount before the adjudication order. The remaining demand of Rs.20 lakhs was related to management consultancy service, infrastructure, intellectual property rights, and services received from foreign companies.

5. The Revenue contended that the applicant, as a recipient of taxable services from foreign companies, was liable for service tax. The Tribunal found the demand of Rs.20 lakhs for services received from foreign companies valid and directed the applicant to deposit this amount within eight weeks.

6. The Tribunal granted a waiver for the remaining dues upon the deposit of Rs.20 lakhs, staying the recovery during the appeal's pendency. The compliance date was set for a specific day in December 2013.