2007 (11) TMI 238 - AT - Service Tax

CHA was denied the benefit of reimbursable charges & abatement as per Boards Circular on the ground that he has not produced evidence with regard to reimbursement of amount to customers in view of impugned circular, other circumstantial evidence (invoices & letters) can also be considered in absence of evidence from customers - assessee has already paid ST of 85% on the value arrived at by them - matter has been referred to Larger Bench on issue of Input Service credit so stay is granted

Summary

Issues involved:
1. Requirement of pre-deposit of total Service Tax and Education Cess.
2. Dispute regarding maintaining separate records for availing benefits under Board's Circular.
3. Contention on producing evidence for reimbursement of charges.
4. Availing credit on 'Input Service' and reference to Larger Bench.
5. Granting waiver of pre-deposit and stay on recovery.

Analysis:

Issue 1: Requirement of pre-deposit
The appellants were directed to pre-deposit a total amount of Service Tax and Education Cess. The Revenue insisted on levying Service Tax on the balance amount where the appellants claimed benefits under the Board's Circular. The Commissioner confirmed the demands, leading to the appellants contesting the requirement for pre-deposit.

Issue 2: Dispute over maintaining records
The dispute arose from the appellants' failure to maintain separate records as per the Revenue's claim. The appellants argued that their invoices showing reimbursable amounts were sufficient evidence, contrary to the Revenue's stance. The Commissioner upheld the demands, prompting the appellants to challenge the decision.

Issue 3: Contention on producing evidence
The appellants argued that the Board's Circular did not mandate producing evidence from customers for reimbursement. They asserted that customers would not pay without such a provision, emphasizing the adequacy of their invoice details. The Tribunal acknowledged the absence of a specific provision and considered other circumstantial evidence presented.

Issue 4: Availing credit on 'Input Service'
The matter of availing credit on 'Input Service' was referred to a Larger Bench. The appellants referenced a case involving ABB Ltd. where a waiver of pre-deposit was granted. The Tribunal noted the ongoing discussions on this issue and the waiver granted in similar cases.

Issue 5: Granting waiver and stay on recovery
After careful consideration, the Tribunal observed that the appellants had paid a significant portion of the Service Tax and complied with Board's Circular and Cenvat Credit Rules. Acknowledging the lack of specific evidence requirements in the Circular, the Tribunal granted a waiver of pre-deposit. Additionally, in line with the ABB Ltd. case, a stay on recovery was allowed until the appeal's disposal, aligning the hearing dates for both cases.

This detailed analysis covers the various issues addressed in the judgment, highlighting the arguments presented by the parties and the Tribunal's considerations leading to the decision on pre-deposit requirements, evidence production, credit availing, and the grant of waiver and stay on recovery.