2009 (6) TMI 203 - AT - Service Tax

Contention of the applicant is that the applicant is registered with the Revenue under three different categories i.e. (i) Clearing and Forwarding Agent (ii) Business Auxiliary Services & (iii) Goods Transport Agencies (GTA) and paying appropriate Service Tax on all three Services. - contention of the Revenue is that as all the activities undertaken by the applicants are covered under the category of Clearing and Forwarding Agent - prima facie the applicant has a strong case in their favour - Stay petition is allowed.

Summary

Issues:
1. Waiver of pre-deposit of Service Tax and penalty for a Clearing and Forwarding Agent.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Kolkata involved the issue of waiver of pre-deposit of Service Tax amounting to Rs. 52,09,304/- and penalty for a Clearing and Forwarding Agent. The applicant contended that they were registered under three different categories - Clearing and Forwarding Agent, Business Auxiliary Services, and Goods Transport Agencies, and were paying appropriate Service Tax for all three services. The demand was challenged on the grounds that the amounts received for these services should not be treated as gross amount received solely as a Clearing and Forwarding Agent.

The Revenue argued that since all activities undertaken by the applicant fell under the Clearing and Forwarding Agent category, they were liable to pay Service Tax on the gross amount received for all activities. However, the Tribunal noted that the applicant was registered under different service categories with the Revenue Authorities and was paying appropriate Service Tax for each category, which had been accepted. Consequently, the Tribunal found that the applicant had a strong case in their favor. As a result, the Tribunal ruled in favor of the applicant, waiving the pre-deposit of the Service Tax amount and penalty. The recovery of the same was stayed during the pendency of the appeal, with the stay petition being allowed.

This judgment highlights the importance of proper registration under relevant service categories and the payment of appropriate Service Tax. It also emphasizes the need for consistency in tax compliance across different service categories to avoid disputes and potential liabilities. The decision to waive the pre-deposit and stay the recovery showcases the Tribunal's consideration of the applicant's compliance history and the strength of their case.