2015 (1) TMI 769 - AT - Service Tax

Waiver of pre-deposit of service tax, interest and penalties - business support services - renting of immovable property services - benefit of the Small Scale Exemption Notification - Held that - in view of the Explanation to provisions 3(B) of the Notification, prima facie the applicant has a strong case in their favour. Therefore, the pre-deposit of the dues is waived and recovery of the same is stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
1. Miscellaneous application filed for waiver of pre-deposit of service tax, interest, and penalties.
2. Interpretation of Small Scale Exemption Notification regarding aggregate value of taxable services for service tax.

Analysis:
1. The applicant filed a miscellaneous application seeking waiver of pre-deposit of service tax, interest, and penalties. The proceedings were initiated through a show cause notice demanding service tax for business support services and renting of immovable property services. The adjudicating authority initially dropped the proceedings, but the Revenue reviewed the order and held that the Small Scale Exemption Notification did not apply to the applicants. The contention of the applicant was that the aggregate value for exemption should not include receipts from exempted services like business auxiliary services. The Revenue argued that all receipts, including those from exempted services, should be considered. The Tribunal found that the applicant had a strong case based on the Explanation to provisions of the Notification. Consequently, the pre-deposit of dues was waived, and recovery stayed during the appeal process.

2. The crux of the issue revolved around the interpretation of the Small Scale Exemption Notification concerning the calculation of the aggregate value of taxable services for service tax purposes. The applicant argued that exempted services, such as business auxiliary services, should not be included in the calculation of the aggregate value. On the other hand, the Revenue contended that all receipts, including those from exempted services, should be considered. The Tribunal analyzed the provisions of the Notification and found that the applicant had a strong case in their favor based on the Explanation to the relevant provisions. As a result, the Tribunal allowed the stay petition, waived the pre-deposit of dues, and stayed the recovery during the pendency of the appeal.

This judgment highlights the importance of correctly interpreting statutory notifications and exemptions in tax matters, emphasizing the need for a thorough understanding of the legal provisions to determine the applicability of exemptions and the calculation of taxable amounts.