2016 (8) TMI 191 - AT - Service Tax

Waiver of pre-deposit - Supply of tangible goods services - scope of taxable service as per Section 65 (105)(zzzzj) - supply of tangible goods without transferring the right of possession and effective control of such machinery, equipment and appliances. - Held that - Prima facie, the tax liability on the applicant for the above mentioned service appears to be sustainable. The applicability of service tax in terms of the above legal provisions to the applicant has to be examined in detail, which will necessarily be undertaken at the time of final hearing of the case along with the question of applicability of time bar to the demand, as pleaded by the applicant. - Stay granted partly.

Summary

Issues:
Prayer for waiver of pre-deposit and stay of recovery of the adjudicated service tax demand.

Analysis:
The appellant sought a waiver of pre-deposit and stay of recovery of the confirmed service tax demand, penalty under Sections 77 and 78 of the Finance Act, 1994, along with interest. The appellant argued that the service tax was not payable as they did not provide the taxable service of "supply of tangible goods" as defined under Section 65(105)(zzzzj). They contended that they supplied computers, printers, UPS, software, and furniture to the Education Department of Delhi Government under a lease agreement, not transferring possession or control. Additionally, the appellant challenged the demand on the grounds of being time-barred, asserting that the demand for an extended period was unjustified. The appellant requested a full waiver of pre-deposit until the appeal's disposal.

The respondent countered, stating that the impugned order correctly identified non-payment of service tax on the supply of tangible goods based on the agreement between the appellant and the Delhi Government. The respondent argued that the appellant had suppressed material facts regarding service provision, making the demand for an extended period legally valid.

Upon hearing both parties and reviewing the appeal records, it was established that the appellant supplied various hardware, software, accessories, and consumables to the Education Department. The agreement outlined the appellant's responsibilities, including safety, security, insurance, and personnel provision for operational assistance. The Tribunal found prima facie sustainability of tax liability on the appellant for the services provided. The detailed examination of service tax applicability and time bar would be conducted during the final hearing.

Ultimately, the Tribunal determined that the appellant did not demonstrate financial hardship warranting a full waiver of the adjudicated dues. As a result, the appellant was directed to deposit a specified amount within a set timeframe, with recovery of the remaining tax, interest, and penalty stayed pending the appeal's resolution.