2016 (8) TMI 148 - AT - Service Tax

Waiver of pre-deposit - Demand of service tax - providing various services to IRCTC - Business Support Services (supply of bed rolls for the rail passengers), Outdoor Catering Services (supply of newspaper, Catering Charges, renting of immovable property (hall rent/restaurant lease rent), intellectual property tax (royalty income), etc. - Held that - At this prima facie stage, we find that the applicant did provide taxable services to IRCTC. The nature of such taxable services along with its correct classification is subject matter of detailed examination at the time of final disposal of the appeal. At this prima facie stage, we find that the applicant has failed to make a case for full waiver of all the adjudicated dues for admission of their appeal. - stay granted partly.

Summary

Issues: Stay application for waiver of pre-deposit of service tax demand along with penalties under Section 76, 77, and 78 of the Finance Act, 1994.

Analysis:
1. The appellant contested the service tax demand confirmed by the Original Authority under categories like "Business Support Services" and "Outdoor Catering Services" among others, related to services provided to Indian Railway Catering and Tourism Corporation Ltd. The appellant argued against the taxability of supplying bed rolls and newspapers, stating that certain demands were dropped for subsequent periods. The appellant also highlighted the non-receipt of consideration for some services as a reason for not being liable to pay service tax.

2. The appellant's counsel emphasized that the supply of bed rolls and newspapers should not fall under taxable services categories like "BSS" and "Outdoor Catering Services." However, the respondent's representative contended that these services were indeed taxable under a composite contract with IRCTC. The respondent disputed the appellant's claim of non-receipt of consideration, citing lack of evidence to support it.

3. After hearing both sides and reviewing the appeal records, the Tribunal found that the appellant did provide taxable services to IRCTC. While acknowledging the need for detailed examination of the services' nature and classification during the final disposal of the appeal, the Tribunal noted that the appellant failed to establish a case for a full waiver of the adjudicated dues. Referring to precedents, the Tribunal ordered a pre-deposit of ?35 Lakhs within eight weeks, staying the recovery of the remaining adjudicated tax, interest, and penalty pending appeal disposal.

4. The Tribunal's decision was based on the understanding that the appellant's services were taxable, warranting a pre-deposit to proceed with the appeal process. The order aimed to balance the interests of both parties by requiring a partial payment while halting further recovery actions until the appeal's resolution.

This detailed analysis of the judgment covers the issues involved in the stay application for the waiver of pre-deposit of the service tax demand and penalties under the Finance Act, 1994.