2008 (7) TMI 283 - AT - Service Tax

Management Consultancy services contention that there is no element of advice, consultancy or technical assistance in the services provided - services provided by the appellant were for not managing client s affairs but were only of assistance to them - Board s Circular in F. No. 341/21/99-TRU having clarified that secretarial assistance shall be beyond the scope of levy - Perusal of impugned order does not call for total waiver of pre-deposit say granted partly

Summary

Issues:
1. Stay application for waiver of pre-deposit of service tax, Education Cess, interest, and penalties.
2. Applicability of service tax under the category of Management Consultants.
3. Interpretation of law regarding the nature of services provided by the appellant.
4. Registration under the Act and liability to tax for providing services as a management consultant.
5. Interpretation of Section 65(105)(r) of the Act and the definition under Section 65(65).
6. Acceptance of the appellant's proposal for an interim measure during the pendency of appeal.

Analysis:
1. The appellant filed a stay application seeking waiver of pre-deposit of service tax, Education Cess, interest, and penalties. The appellant argued that they are not liable to pay service tax under the Management Consultants category. The learned Senior counsel for the appellant contended that the services provided did not involve advice, consultancy, or technical assistance but were merely assistance to clients. Referring to a Board's Circular, the appellant claimed that the impugned order was legally flawed. The appellant proposed to deposit Rs. 1 crore voluntarily to safeguard revenue interests during the appeal, seeking an early hearing. The Revenue agreed to this proposal, and the Tribunal directed the appellant to make the deposit within eight weeks for a stay on the balance of the demand.

2. The Authority below had granted registration to the appellant under the Act as a Management Consultant. The demand in question pertained to the period from 2001-2002 to 2004-2005. After considering the activities, submissions, provisions of law, and materials on record, the Authority found the appellant liable for service tax as a management consultant. Both sides acknowledged that services provided by management consultants were subject to levy under specific sections of the Act, and the impugned order did not warrant a complete waiver of pre-deposit.

3. The Tribunal emphasized the necessity to thoroughly examine the scope of services provided and the interpretation of law involved in the case. The Tribunal accepted the appellant's proposal as an interim measure to safeguard revenue interests during the appeal process. The Tribunal highlighted the uniqueness of each case and the importance of meeting legal standards to reach a conclusion. The order directed the appellant to make a specified pre-deposit within a set timeframe and allowed both parties to apply for an early hearing in the interest of justice.