2008 (4) TMI 134 - AT - Service Tax

Services provided by appellant regarding research of the product for the foreign company fall under Market Research Agency Services - but services rendered to the foreign company and getting paid in foreign exchange will be eligible for exemption under Notification No. 6/99 and subsequently by Notification No. 21/03 hence stay is granted partly

Summary

Issues:
1. Application for waiver of pre-deposit of Service tax and penalties confirmed.
2. Classification of services under 'Market Research Agency Services'.
3. Eligibility for exemption under Notification No. 6/99 and Notification No. 21/03.

Analysis:
1. The judgment pertains to an application for the waiver of pre-deposit of Service tax and penalties confirmed. The applicant contested the levy of Service Tax amount and penalties, arguing that the services provided were not liable for taxation. The Tribunal considered the submissions and records before them.

2. The dispute centered around the classification of services as 'Market Research Agency Services'. The Revenue alleged that the applicant provided services related to research on products for a foreign company, falling under the said category. However, the Tribunal noted that the payment received in India was in convertible foreign exchange, potentially qualifying for exemption under Notification No. 6/99. The Tribunal referred to a previous decision on a similar issue regarding 'Technical Testing and Analysis Service' to support their conclusion on eligibility for exemption.

3. After reviewing the facts, including the payment received in foreign exchange for services rendered, the Tribunal found that the applicant had a prima facie case for the waiver of pre-deposit of amounts involved. Consequently, the Tribunal allowed the application for waiver of pre-deposit and stayed the recovery of the amount until the appeal's disposal. This decision was based on the applicant's contention that the Service Tax was not leviable and the consideration of payments received in foreign exchange for services provided.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal and the reasoning behind their decision to grant the waiver of pre-deposit in this case.