2014 (10) TMI 767 - AT - Service Tax

Business support service - Hostel facility service - Canteen service - Held that - According to the appellant the main business of TCS is software development and running of hostel cannot be termed as a support service. Hostel facility has to be treated as perk of the TCS employee and if it is treated as business support service, TCS should be entitled to take CENVAT credit. After going through the definition of business support service, we find that the appellant does not have a solid case and issue is debatable. As regards out-door catering, the liability arises only when such service is provided in the premises of the service receiver and in this case such service is provided only in the hostel and therefore liability may not arise. demand for the normal period may be sustainable - Partial stay granted.

Summary

Issues:
1. Whether providing hostel facility and canteen services by the appellant constitute business support service and out-door catering services, leading to service tax liability.
2. Whether the demand for service tax for the period from 2006-07 to March 2012 is sustainable.
3. Whether the appellant is required to make a pre-deposit for hearing the appeal and stay against recovery during the pendency of the appeal.

Analysis:
1. The appellant provided hostel facility and canteen services to employees of Tata Consultancy Services (TCS). The issue revolved around whether these services fall under business support service and out-door catering services, attracting service tax liability. The tribunal found that the hostel facility cannot be solely categorized as business support service, considering it as a perk for TCS employees. The liability for out-door catering services arises only when provided in the service receiver's premises, which in this case was the hostel. The tribunal deemed the issue debatable, leading to a partial relief for the appellant.

2. The demand for service tax covering the period from 2006-07 to March 2012 was assessed. The tribunal acknowledged the sustainability of the demand for the normal period, considering the contentious nature of the issue. To facilitate the appeal process, the tribunal directed the appellant to deposit a specific amount by a given date, ensuring compliance for further proceedings. The tribunal waived the pre-deposit of the remaining dues subject to the initial deposit, granting a stay against recovery during the appeal's pendency.

3. In addressing the requirement for a pre-deposit and stay against recovery, the tribunal emphasized the interpretation of the statute and classification as crucial factors. The tribunal set a specific amount for deposit by a specified date, with compliance being a prerequisite for the appeal's continuation. Noting the absence of financial difficulty, the tribunal granted relief by waiving the pre-deposit of the balance dues and allowing a stay against recovery during the appeal's consideration, ensuring procedural fairness and facilitating the appeal process effectively.