2008 (9) TMI 160 - AT - Service Tax

Applicants are issuing meal and gift vouchers to corporate clients who in turn give the same to their employees for en-cashing held that Business Auxiliary Services introduced with effect from 1-5-2006 will cover these services - submission of applicant that once specific services are introduced as taxable from a particular date, then the same could not get covered in earlier services, have strong force - applicant has made out a prima facie case for waiver of pre-deposit

Summary

Issues:
Interpretation of Service Tax liability on meal and gift vouchers under Business Auxiliary Services.

Analysis:
The case involved a dispute regarding the Service Tax liability on meal and gift vouchers issued to corporate clients by the appellant. The lower authorities held that the appellant needed to discharge Service Tax liability on the service charges received from clients and affiliates. The appellant argued that the services rendered could fall under different sections of the Finance Act, specifically mentioning Section 66(33A) and 66(104c) introduced from 1-5-2006. They contended that the services were not covered under the definition relied upon by the Revenue authorities. The appellant cited various Tribunal decisions to support their position, emphasizing that services brought under the Service Tax net from a specific date are presumed not to be covered earlier.

The Revenue authorities, on the other hand, asserted that the services provided by the appellant fell under Section 65(91) of the Finance Act, which covers Business Auxiliary Services. They argued that the introduction of new services from 1-5-2006 did not exclude these services from the Service Tax net for the earlier period. After considering the submissions from both sides and examining the records, the Tribunal analyzed the nature of the services provided by the appellant. They noted that the services offered by the appellant were akin to 'Business Support Services' introduced under sub-section (104c) of Section 65 of the Finance Act, 1994, from 1-5-2006. The Tribunal agreed with the appellant's contention that once specific services become taxable from a particular date, they cannot be considered covered under earlier services.

In light of the arguments presented and the legal provisions, the Tribunal found merit in the appellant's case for a waiver of pre-deposit of the amounts involved. Consequently, the Tribunal allowed the application for the waiver of pre-deposit and stayed the recovery of the amounts until the appeal's final disposal. The decision was based on the interpretation of the relevant provisions of the Finance Act and the applicability of Service Tax to the services provided by the appellant.