2015 (5) TMI 35 - AT - Service Tax

Waiver of pre deposit - 'business support service' - Held that - On perusal of one of the inspection orders which reveals that the inspection was to verify compliance to good practices in accordance with law. It can be nobody's case that inspecting agency which only inspected the facility without rendering any advice could be covered under the category of management or business consultant as they did not provide any service directly or indirectly in connection of management of any organisation or business nor did they provide any advice, consultancy or technical assistance in relation to any area of management. Prima facie thus, this component of demand is on a weak wicket. - the appellants have been able to make out a good case for waiver of pre-deposit and we order accordingly staying recovery of the impugned liability during pendency of the appeal. - Stay granted.

Summary

Issues involved:
1. Stay application against Order-in-Original confirming service tax demand and Cenvat credit recovery.
2. Consideration under facility purchase agreement for business support service.
3. Amount received as refundable loan for business support service.
4. Service tax demand on clinical trials undertaken.
5. Alleged short payment of service tax in comparison to annual accounts.
6. Excess utilization of Cenvat credit.
7. Reverse charge demand on ANVISA fees paid for management or business consultancy service.

Analysis:
1. The first issue pertains to consideration received under the facility purchase agreement. The appellants argued that the amount was for the sale of the facility, not for business support service. The adjudicating authority rejected this without providing a basis. The Tribunal found the sale proceeds cannot be considered payment for support services, warranting a waiver of pre-deposit for this demand component.

2. The second issue involves the amount received as a refundable loan for business support service. Despite the authority's stance, evidence showed the loan was interest-free and repayable, with documented repayments. The demand lacked a sustainable basis without proof that the loan masked service payment, justifying a waiver of pre-deposit.

3. The third issue concerns service tax demand on clinical trials. Precedent indicated that services not taxable before a specific date are exempt, aligning with the appellants' case. Therefore, a waiver of pre-deposit for this demand component was warranted.

4. The fourth and sixth issues revolve around alleged short payment of service tax compared to annual accounts. The appellants clarified the difference between actual receipts and accounts, providing evidence. The authority's failure to address this and shift the burden to the Revenue justified a waiver of pre-deposit for these demands.

5. The fifth issue addresses excess utilization of Cenvat credit. The appellants argued against this claim, stating no restrictions applied due to no exempted services. The authority's failure to identify exempted services rendered the demand baseless, warranting a waiver of pre-deposit.

6. The last issue involves reverse charge demand on ANVISA fees for management consultancy. Inspection orders revealed no consultancy or management services provided, weakening the demand's basis. Consequently, a waiver of pre-deposit for this demand component was justified.

In conclusion, the Tribunal found sufficient grounds to grant a waiver of pre-deposit for all components of the impugned demand. The recovery of the liability was stayed during the appeal's pendency.