2017 (9) TMI 882 - AT - Service Tax

Waiver of pre-deposit - Business Auxiliary Services - Held that - Considering the fact that whether the applicant is entitle for benefit of exemption Notification No. 06/2005 that also be dealt at the time of final hearing. Prima-facie fact that the applicant is promoting the business therefore at this stage we direct the applicant to make a pre-deposit of 44, 000/- within the period of 4 weeks and the compliance to be reported on 29.08.2017 - application disposed off.

Summary

Issues:
1. Waiver of pre-deposit under the Finance Act, 1994 for Service Tax confirmed as "Business Auxiliary Services"
2. Applicability of exemption under Notification No. 06/2005 for the appellant's franchisee services

Analysis:
Issue 1: The appellant sought waiver of pre-deposit of Rs. 1,31,589/-, along with interest and penalties confirmed under the Finance Act, 1994 for the appeal concerning Service Tax categorized as "Business Auxiliary Services." The appellant, a franchisee of M/s Dewsoft Overseas Private Ltd., received commission for promoting their business, leading to a show cause notice for Service Tax demand for the period 2006-2007 and 2007-2008. The appellant contended that exemption under Notification No. 06/2005 applied, reducing their liability to &8377; 44,000. The Tribunal directed a pre-deposit of &8377; 44,000 within 4 weeks, with the remaining amount of Service Tax, interest, and penalties waived off during the appeal's pendency.

Issue 2: The appellant argued that their activity constituted franchisee services, citing a previous Tribunal judgment in the case of M/s Dewsoft Overseas Private Ltd. vs. CST, New Delhi. The Tribunal acknowledged the appellant's promotion of their client's business and receipt of commission, leading to the demand for Service Tax under "Business Auxiliary Service." The classification dispute and the entitlement to exemption under Notification No. 06/2005 were to be addressed during the final hearing. The Tribunal emphasized that the appellant's promotional activities warranted the pre-deposit, with the exemption and classification issues to be resolved later. The stay application was disposed of accordingly, with the compliance deadline set for reporting on 29.08.2017.

This judgment by the Appellate Tribunal CESTAT CHANDIGARH, delivered by Mr. Ashok Jindal, Member (Judicial), and Mr. Devender Singh, Member (Technical), addressed the appellant's request for pre-deposit waiver and the applicability of exemption under Notification No. 06/2005 in the context of Service Tax related to "Business Auxiliary Services" provided by a franchisee.