2015 (2) TMI 799 - AT - Service Tax

Waiver of pre deposit - payment of service tax by the other person on behalf of assessee (the service provider) - Commercial Training or Coaching Services - Held that - Applicant contended before the adjudicating authority that the entire service tax liability of their Coimbatore Branch had been discharged by M/s. Maya. Adjudicating authority observed that service tax liability has to be discharged by the applicant, service provider and therefore he has not accepted the payment of tax by M/s. Maya. In this context, Ld.AR drew the attention of the Bench to relevant portion of the order of Commissioner (Appeals). But, we are not impressed with the submission of Ld. AR on the ground that the adjudicating authority had not disputed the payment of tax by M/s. Maya in the adjudication order. We find that the case law relied upon by Ld. AR, where no tax was paid by other persons. Prima facie , we find that the tax was paid by M/s. Maya which should have been paid by the applicant, according to Revenue. Hence the applicant has prima facie a strong case for waiver of entire amount of tax along with interest and penalty. Accordingly, we waive the predeposit of the entire amount of tax and penalty till disposal of appeal. - Stay granted.

Issues:
1. Liability of service tax under the category of Commercial Training or Coaching Services.
2. Discharge of service tax liability by M/s. Maya on behalf of the applicant.
3. Sufficiency of evidence produced by the applicant to support their claim.
4. Interpretation of the adjudication order regarding payment of tax by M/s. Maya.
5. Granting of stay application and waiver of tax, interest, and penalty.

Analysis:

1. Liability of service tax under the category of Commercial Training or Coaching Services:
The case involved the confirmation of a demand for service tax on computer education and training programs in Graphic Animation and Cinematics. The adjudicating authority upheld the demand under the category of Commercial Training or Coaching Services. The Tribunal considered the arguments from both sides and examined the nature of services provided by the applicant. It was established that the training and coaching services rendered fell within the ambit of taxable services, leading to the liability of service tax on the applicant.

2. Discharge of service tax liability by M/s. Maya on behalf of the applicant:
The applicant claimed that M/s. Maya, with whom they were associated, had paid the entire amount of tax on their behalf. The Tribunal reviewed the contentions and the adjudication order, noting that the adjudicating authority did not dispute the payment of tax by M/s. Maya. Despite the Revenue's stance that the liability rested with the applicant, the Tribunal found that M/s. Maya's payment of tax indicated a strong case for waiver of the tax amount along with interest and penalty until the appeal's disposal.

3. Sufficiency of evidence produced by the applicant to support their claim:
The Revenue argued that the applicant failed to produce adequate evidence to substantiate their assertion that they were not engaged in commercial training or coaching services. However, the Tribunal's decision to grant the stay application and waive the tax amount indicated a preliminary acceptance of the applicant's claim, highlighting the importance of presenting compelling evidence to support such contentions in future proceedings.

4. Interpretation of the adjudication order regarding payment of tax by M/s. Maya:
The Tribunal scrutinized the adjudication order and the arguments put forth by the Revenue regarding the responsibility for discharging the service tax liability. Despite referencing relevant case law where no tax was paid by other parties, the Tribunal emphasized that M/s. Maya's payment of tax, which the Revenue contended should have been made by the applicant, presented a persuasive case for granting the waiver and allowing the stay application.

5. Granting of stay application and waiver of tax, interest, and penalty:
Ultimately, the Tribunal decided to waive the predeposit of the entire tax amount and penalty until the appeal's final disposal. By allowing the stay application, the Tribunal provided interim relief to the applicant, acknowledging the prima facie strength of their case for the waiver based on the payment made by M/s. Maya. The decision underscored the importance of thoroughly examining the facts and circumstances surrounding tax liabilities in service-related disputes.

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