2009 (4) TMI 271 - AT - Service Tax

Demand is on account of the (i) Services of Courier Agency provided in the capacity of subcontractor (ii) Business Auxiliary Service for the service rendered as Air Cargo Agents. - in respect of the Courier Agency Service, the appellants had acted as a sub-contractor and the main agency has already discharged the service tax, so appellant is nto liable to pay tax again as sub-contractor - we find that the service of Air Cargo would not be liable to tax under the Business Auxiliary Service for the period prior to 10-9-2004. Stay granted partly

Summary

Issues:
1. Pre-deposit requirement of service tax, interest, and penalties.
2. Demand for services provided as a subcontractor to a courier agency and as air cargo agents.
3. Discharge of service tax liability by the main agency in the case of Courier Agency Service.
4. Association's Writ Petition before the High Court regarding the demand on 'Business Auxiliary Service.'
5. Tax liability on Air Cargo service under 'Business Auxiliary Service' before 10-9-2004.

Analysis:

1. The judgment addresses the requirement for pre-deposit of amounts including service tax, interest, and penalties. The appellants were directed to pre-deposit Rs. 1,00,000 within one month, following which the pre-deposit of the remaining balance was waived, and recovery stayed until the appeal's disposal. Failure to comply would lead to dismissal of the appeal.

2. The demand in question pertained to services provided as a subcontractor to a courier agency and as air cargo agents. The appellants argued that the demand for Courier Agency Service was not sustainable as the main agency had already discharged the service tax. Regarding the demand for 'Business Auxiliary Service,' it was highlighted that the matter was sub judice before the High Court, and the liability was yet to be decided.

3. The judgment acknowledged that the appellants had acted as a subcontractor for the Courier Agency Service, and the main agency had fulfilled the service tax liability. This fact was accepted, leading to the conclusion that the demand for this service was not valid. The demand for 'Business Auxiliary Service' was under scrutiny due to the ongoing Writ Petition before the High Court.

4. After careful consideration, the Tribunal ruled that the service of Air Cargo would not be taxable under 'Business Auxiliary Service' before 10-9-2004. To determine the correct liability, a pre-deposit of Rs. 1,00,000 was ordered, with the remaining amount waived until the appeal's resolution. Compliance was required by a specified date, failing which the appeal would be dismissed.

5. The judgment provided a detailed analysis of the issues related to service tax demands, pre-deposit requirements, and the specific nature of services provided by the appellants. It highlighted the importance of compliance with the Tribunal's directives to avoid dismissal of the appeal and emphasized the need for a thorough examination of the tax liabilities associated with the services in question.