2009 (3) TMI 197 - AT - Service Tax

Demand confirmed on the ground that the applicants herein are providing Business Auxiliary Services in promoting Abacus system of the main franchisee. - Departmental Representative on the other hand would submit that the services rendered by the applicant are promoting and marketing business of the main franchisee. Hence, they will be liable to pay service tax. - we find that the taxability of Abacus system to service tax was decided by us in many cases. Stay granted in identical case by Tribunal - Accordingly, we find that the applicants have made out a prima facie case for the waiver of the pre-deposit of the amounts involved. Pre-deposit waived

Summary

Issues:
Stay applications against Orders-in-Appeal involving service tax, education cess, penalties under various sections of the Finance Act, 1994 for providing "Business Auxiliary Services" in promoting 'Abacus' system of the main franchisee.

Analysis:

1. Pre-Deposit Amounts:
The appellants were required to pre-deposit various amounts including service tax, education cess, and penalties under different sections of the Finance Act, 1994. The lower authorities confirmed these amounts based on the argument that the appellants were promoting the business of the main franchisee through 'Abacus' system. The appellants contended that the issue was covered by previous Stay Orders. The Departmental Representative argued that the services rendered were indeed promoting and marketing the main franchisee's business, thus liable for service tax.

2. Decision on Taxability:
Upon careful consideration, the Tribunal noted that the taxability of the 'Abacus' system to service tax had been decided in previous cases. The Tribunal referenced a Stay Order dated 25-2-2009, which was identical to the issue at hand. Consequently, the Tribunal found that the appellants had established a prima facie case for waiving the pre-deposit amounts. The application for waiver was allowed, and recovery was stayed until the appeal's disposal. Notably, the Tribunal clarified that this stay order would remain effective even beyond 180 days, citing a Supreme Court judgment in the case of CCE, Ahmedabad v. Kumar Cotton Mills Pvt. Ltd. reported in 2005.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Bangalore highlights the issues involved, the arguments presented, and the Tribunal's decision regarding the pre-deposit amounts and taxability of the services provided.