2014 (10) TMI 245 - AT - Service Tax

Waiver of pre deposit - Levy of tax on various services provided - Held that - As regards the service tax on airline commission, incentives and CCX fees, the appellant had already made a pre-deposit of ₹ 71 lakhs in terms of earlier order. As regards the freight rebate and BBF, the matter needs detailed examination in the content of the revised guidelines issued by the CBEC with effect from 2012. Further, there appears to be merit in the contention of the appellant that these demands are time barred. Thus, the appellant has made out a case for grant of stay. Accordingly, we grant unconditional waiver from pre-deposit of dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal - Stay granted.

Summary

Issues:
Service tax demands on Airline Commissioner, Incentives, CCX Fees, Freight Rebate, and BBF; Interest and penalties imposed; Prima facie view on previous litigation; Liability of service tax on export transactions; Applicability of service tax on import transactions; Barred demands by limitation; Pre-deposit made in previous litigation; Stay petition.

Analysis:

1. The appellant contested the service tax demands confirmed by the Commissioner of Central Excise, Mumbai-II, on various items including Airline Commissioner, Incentives, CCX Fees, Freight Rebate, and BBF, along with interest and penalties. The appellant argued that this was the second round of litigation and the Tribunal had previously directed a pre-deposit of Rs. 71 lakhs for certain items. The appellant claimed that demands related to Freight Rebate and BBF were not sustainable as they were either not liable to tax in India or were barred by limitation.

2. The appellant highlighted that in the previous round of litigation, the Tribunal had taken a prima facie view that demands on Airline Commission, Incentives, and CCX Fees were sustainable. However, the matter regarding Freight Rebate and BBF was remanded back to the adjudicating authority for further consideration. The appellant argued that demands related to Freight Rebate were not applicable as they were rendered on their own account for export transactions, making them not liable to tax in India.

3. The learned Additional Commissioner representing the Revenue contended that demands on Freight Rebate were sustainable based on previous Tribunal decisions and the liability under Business Auxiliary Services (BAS). Regarding BBF, it was argued that it pertained to an import transaction and was liable to tax in India. The Revenue sought to put the appellant to terms for the demands.

4. After considering the submissions from both parties, the Tribunal found merit in the appellant's arguments regarding the demands on Freight Rebate and BBF. The Tribunal noted the need for detailed examination in light of revised CBEC guidelines from 2012. It was acknowledged that these demands might be time-barred. Consequently, the Tribunal granted the appellant an unconditional waiver from pre-deposit and stayed the recovery of dues during the appeal's pendency.

This detailed analysis covers the various issues involved in the legal judgment, including the service tax demands, previous litigation, liability on export and import transactions, limitation on demands, pre-deposit made, and the final decision on the stay petition.