2014 (8) TMI 344 - AT - Service Tax

Waiver of pre deposit - Business Auxiliary Services and Cargo Handling Services - appellant had bagged the Urea and distributed the same under the Essential Commodity Act - Held that - Appellant has filed Bills of Entry and discharged appropriate assessed customs duty as importer - appellant has bagged the said fertilizer in bags as per the directions of the Govt. of India as Urea is controlled item - it is also brought to our knowledge that in the said import, there is sale of Urea from the Government of India, which is very clear from facts that appellant has paid for imported Urea to Government of India - amount, if paid to the Government of India for further conducting activities of bagging and distribution of the said Urea, prima facie, it seems that there is purchase of Urea and sale, which is again as per the Government of India s directions - prima facie, appellant has made out a case for unconditional waiver.- Stay granted.

Summary

Issues:
1. Stay petition for waiver of pre-deposit of service tax liability, interest, and penalties.
2. Determination of services provided by the appellant - Business Auxiliary Services and Cargo Handling Services.
3. Dispute regarding the appellant's activity of bagging and distributing Urea under the Essential Commodity Act.
4. Allegation of suppression or misstatement of facts by the appellant.
5. Interpretation of the amount received by the appellant for services rendered to the Government of India.

Analysis:
1. The appellant filed a stay petition seeking a waiver of pre-deposit of confirmed service tax liability, interest, and penalties. The adjudicating authority found the appellant liable for Business Auxiliary Services and Cargo Handling Services due to non-discharge of service tax liability.

2. The appellant's counsel argued that the appellant's activity of bagging and distributing Urea under the Essential Commodity Act does not fall under Cargo Handling Services or Business Auxiliary Services. He highlighted that the appellant considered himself an importer, paid customs duty, and purchased Urea from the Government of India.

3. The departmental representative contended that the amount received by the appellant was payment for services rendered to the Government of India. However, the Tribunal noted that the appellant had filed Bills of Entry, paid customs duty, and bagged the fertilizer as per government directions, indicating a purchase and sale transaction.

4. After considering both parties' submissions, the Tribunal found in favor of the appellant for a complete waiver of pre-deposit. The Tribunal emphasized that the appellant's actions, such as paying for imported Urea and following government directions, supported the case for unconditional waiver.

5. Consequently, the Tribunal allowed the application for waiver of pre-deposit and stayed the recovery until the appeal's disposal. The matter was scheduled for expedited hearing due to the substantial amount involved, as requested by both parties.