2015 (9) TMI 1098 - AT - Service Tax

Waiver of pre-deposit of demand of Service Tax - Business Auxiliary services - buying the gas from IGL and thereafter selling the same. - Held that - In similar set of facts in the case of Bharat Petroleum Corpn. Ltd. (2014 (7) TMI 159 - CESTAT MUMBAI) and Bhagyanagar Gas Ltd. (2012 (9) TMI 860 - CESTAT BANGALORE), this Tribunal held that it is a case of sale of goods and not a case of providinig services under business auxiliary service, on the premise that in Mumbai and Bangalore, VAT is payable on gas but in Delhi VAT is exempted from tax. Therefore, it is only distinguishable facts as the goods are exempted from payment of VAT in Delhi that does not mean that applicant shall fall under the category of Business auxiliary services. Therefore, prima facie, we are of the view that facts of the applicants case are similar to Bharat Petroleum Corpn. Ltd. (supra). In these circumstances, the appellant has made out a case for complete waiver of pre-deposit. Consequently, we waive the requirement of pre-deposit of entire amount of service tax, interest and penalty and stay recovery thereof during the pendency of the appeal. - Stay granted.

Summary

Issues:
Waiver of pre-deposit of demand of Service Tax under Business Auxiliary services.

Analysis:
The appellant sought a waiver of pre-deposit of demand of Service Tax amounting to Rs. 65,59,509/- along with interest and penalty of Rs. 5000/- imposed on them under the category of Business Auxiliary services. The case revolved around an agreement with IGL for the sale of CNG where the equipment dispensing gas remained owned by IGL, and the appellant received a commission for the sale. The Revenue demanded service tax from the appellant under the category of business auxiliary services, considering them as agents for promoting and marketing goods supplied by IGL. The appellant contended that they operated on a principal to principal basis and were not liable for service tax, citing precedents where similar transactions were considered as sales of goods on a principal to principal basis. The Revenue argued that the appellant was involved in selling on a commission basis, falling under the category of business auxiliary services. After considering the submissions and analyzing the agreement and the impugned order, the Tribunal found that the appellant's case was similar to previous judgments where transactions were treated as sales of goods, not services under business auxiliary services. The Tribunal granted a complete waiver of pre-deposit, allowing the appellant to avoid payment of the entire amount of service tax, interest, and penalty during the appeal process.