2015 (1) TMI 83 - AT - Service Tax

Waiver of pre deposit - Business Export Service - whether the nature of service provided by the appellant during the period 1-5-2006 to 30-5-2007 falls under taxing entry in Section 65(105)(zzzq) of the Finance Act, 1994 read with the meaning of the term support service under Section 65(104c) of the said Act - Held that - From the agreement it appears that the assessee is developing and supplying contents used by the telecommunication industry for value added services. The above mentioned activities squarely fall within the definition of Development and Supply of Content services and the assessee has rightly classified his service. In view of the fact that the said service is taxable under Development and Supply of Content service the explanation given by the Ministry in DOF No. 334/1/2007-TRU, dated 28-2-2007 covers the activities of the assessee and is rightly classifiable as Business Support Services for the period from 1-5-2006 till the effective date of the new service, viz. Development and Supply of Content service. it is apparent that learned authority has examined the nature of the service provided by the appellant to the telecom operators. Revenue is able to bring its prima facie in its favour establishing nexus of the service provided and received which satisfies mandate of the aforesaid provisions of law. Therefore, there is no scope to grant waiver of pre-deposit fully. - Partial stay granted.

Summary

Issues:
1. Nature of service provided by the appellant during a specific period.
2. Classification of the service under taxing entry in the Finance Act, 1994.
3. Requirement of pre-deposit by the appellant.

Analysis:
1. The main issue in the judgment pertains to determining the nature of service provided by the appellant during a specific period. The Tribunal examined whether the service falls under the taxing entry in Section 65(105)(zzzq) of the Finance Act, 1994, in conjunction with the definition of 'support service' under Section 65(104c) of the said Act. The Tribunal referred to the adjudication order, specifically Para 21, which highlighted that the appellant was involved in developing and supplying content for the telecommunication industry to support the business of the recipient. The Tribunal noted that these activities fell within the definition of 'Development and Supply of Content' services, which were rightly classified as 'Business Support Services' based on the explanation provided by the Ministry.

2. The Tribunal further analyzed the adjudication order and observed that the revenue was able to establish a prima facie case in its favor, showing the nexus between the service provided by the appellant and the telecom operators. Consequently, the Tribunal found no grounds to grant a full waiver of pre-deposit. Considering the potential impact on Revenue's interest if no pre-deposit was directed, the Tribunal ordered the appellant to deposit a specific amount within a stipulated timeframe to comply with the service tax demand.

3. In the absence of the appellant during the proceedings, the Tribunal justified its decision by citing the precedent set by the Apex Court in the case of Benara Valves Ltd. v. CCE. The Tribunal dismissed the miscellaneous application for early hearing and pronounced the order, emphasizing the necessity for the appellant to comply with the directed deposit within the specified timeline. The judgment highlights the importance of vigilance and compliance in pursuing legal matters before the Tribunal to safeguard the interests of all parties involved.