2010 (5) TMI 348 - AT - Service Tax

Waiver of pre-deposit - services of business auxiliary services - appellant under a contract is undertaking strapping of wire rod coils either on line or off line at wire rod mill - Held that - activity at the most can be covered under the packaging services - Application for waiver of pre-deposit of the amount involved is allowed and recovery thereof stayed till the disposal of the appeal

Summary

Issues:
1. Stay petition for waiver of pre-deposit of service tax, penalties, and interest.
2. Classification of activity as 'Business Auxiliary Services' under clause (v) of the definition.

Analysis:
1. The appellant filed a stay petition seeking the waiver of pre-deposit of service tax, penalties, and interest amounting to Rs. 69,23,240. The demand arose from the appellant providing business auxiliary services to a company during a specific period. The appellant argued that the revenue authorities misclassified the activity as business auxiliary services, contending that it should be considered packaging services instead. The appellant also claimed that the demand was time-barred as queries were raised earlier. The respondent, however, argued that the activity fell under business auxiliary services based on detailed findings by the Commissioner.

2. The Tribunal analyzed whether the activity of strapping wire rod coils at a specific location could be classified as 'Business Auxiliary Services' under clause (v) of the definition. The Tribunal noted that the appellant performed the activity within the factory premises of the client and found similarities with a previous case where a similar activity was not considered business auxiliary services. The Tribunal referenced the findings and ratio of the previous case, indicating a favorable position for the appellant. Additionally, the Tribunal observed that the benefit of a specific notification might apply to the appellant. Consequently, the Tribunal concluded that the appellant established a prima facie case for the waiver of pre-deposit, allowing the application and staying the recovery until the appeal's disposal.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the Tribunal's reasoning leading to the decision to grant the waiver of pre-deposit based on the classification of the activity under 'Business Auxiliary Services.'