2015 (2) TMI 475 - AT - Service Tax

Waiver of pre deposit - Business Auxiliary Service - difference between the discount extended by the automobile manufacturers and the discount extended by the appellant to the customers. - Held that - The findings of the adjudicating authority as well as the first appellate authority indicates that the amount which has been shown by the appellant in his balance sheet as income is the difference between the discount which has been extended by the automobile manufacturers and the discount given by the appellant to the customers. This amount is shown as discount given by the appellant. We find that the learned CA is correct in bringing to our notice that identical issue in the case of Tata Motors Insurance Services Ltd. Vs. CST, Bangalore - 2007 (8) TMI 638 - CESTAT BANGALORE , the co-ordinate bench of this Tribunal has granted unconditional stay. Prima facie, we find that the appellant has made out a case for waiver of pre-deposit of the amount confirmed as service tax liability of approximately ₹ 3.70 lakhs. We consider the amount deposited by the appellant in respect of first two issues as enough deposit to hear and dispose of appeal on merits. Accordingly, the application for waiver of pre-deposit of balance amount is allowed and recovery thereof stayed till the disposal of the appeal. - Stay granted.

Summary

Issues involved:
Service tax liability on amount received for rendering "Business Auxiliary Service"

Analysis:

The judgment by the Appellate Tribunal CESTAT Mumbai dealt with the issue of service tax liability on an amount received for providing "Business Auxiliary Service." The appellant did not contest the service tax liability of approximately &8377; 25.86 lakhs confirmed on the commission received for insurance and financial accommodations provided to customers. However, a difference of around &8377; 3.70 lakhs was in question, relating to the tax liability on the amount shown as income in the balance sheet, representing the variance between discounts offered by automobile manufacturers and those provided by the appellant to customers.

Upon review, it was noted that the amount reflected as income in the balance sheet was the disparity between discounts from manufacturers and those passed on to customers by the appellant. The appellant argued that a similar issue had been addressed in a previous case, Tata Motors Insurance Services Ltd. Vs. CST, Bangalore, where a co-ordinate bench granted unconditional stay. Consequently, the Tribunal found merit in the appellant's case for waiving the pre-deposit requirement for the approximately &8377; 3.70 lakhs disputed tax liability. The Tribunal considered the deposit made by the appellant for the initial two issues sufficient for hearing the appeal on its merits. Therefore, the application for waiving the pre-deposit of the remaining amount was allowed, and recovery was stayed pending the appeal's disposal.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the waiver of pre-deposit for the disputed tax liability amount and staying recovery until the appeal's final resolution.