2014 (1) TMI 39 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Business Auxiliary Service - Held that - prima facie case for the appellants against the demands of Service Tax raised under the head Business Auxiliary Services . It is not in dispute that the appellants were canvassing purchase orders in India for their own overseas-based parent company. It is their submission that this activity involved export of services and hence not taxable. Prima facie, on the facts of this case, this argument is acceptable and is supported by the cited circular and decisions. Hence there will be waiver of pre-deposit and stay of recovery in respect of the balance amount of Service Tax and Education Cesses, interest thereon and penalties - Stay granted.

Summary

Issues:
1. Waiver and stay of Service Tax and Education Cesses demanded under 'Business Auxiliary Service' for specific periods.
2. Prima facie case for waiver and stay based on Board's Circular and Tribunal orders.
3. Taxability of services involving export activities.

Analysis:

1. The appellants sought waiver and stay regarding Service Tax and Education Cesses demanded under 'Business Auxiliary Service' for the disputed periods along with penalties. The records revealed partial payment by the appellant against the demand, while no payment was made towards another demand. The appellant claimed a prima facie case based on Board's Circular and Tribunal orders. The Commissioner reiterated the findings in the impugned order.

2. Upon reviewing the submissions, the Tribunal found a prima facie case in favor of the appellants concerning the demands of Service Tax related to 'Business Auxiliary Services.' The appellants were engaged in canvassing purchase orders in India for their overseas parent company, arguing that this activity constituted export of services and was therefore non-taxable. The Tribunal deemed this argument acceptable based on the facts presented, the cited circular, and previous decisions. Consequently, the Tribunal granted waiver of pre-deposit and stay of recovery for the remaining amount of Service Tax, Education Cesses, interest, and penalties.

3. The judgment highlighted the significance of the nature of services provided by the appellants, emphasizing the export aspect and its impact on the taxability of the services under consideration. By considering the specific circumstances of the case and the legal framework provided by the Board's Circular and Tribunal decisions, the Tribunal made a reasoned decision to grant the waiver and stay sought by the appellants. This analysis underscores the importance of factual and legal arguments in tax disputes, particularly concerning the classification and tax treatment of services involving cross-border transactions.