2013 (6) TMI 235 - AT - Service Tax

Service tax payable on reverse charge mechanism for availing the services of persons located outside - stay petition for waiver of pre-deposit of amount of service tax confirmed - Held that - Lower authorities have come to a conclusion that the appellant has organised a business exhibition abroad and hence liable to pay service tax under the provisions of Section 66A of the Finance Act, 1994, for the amounts paid by appellant for organising such exhibition whereas appellant s contention that they have not organised any exhibition but have paid for participating in such exhibition. There is a vast difference between organising and participating in an exhibition. Both the lower authorities have not considered this obvious difference. Finding strong force in the contentions raised by the assessee that CBEC Circular No. 354/11/2011-TRU dated 22.3.2011, will have bearing on the issue in hand, which has not been discussed by the lower authorities the appellant has made out a case for disposal of his appeal on merits by the first appellate authority after following the principles of natural justice and without insisting on any pre-deposit from the appellant.

Summary

Issues:
1. Stay petition for waiver of pre-deposit of service tax amount.
2. Rejection of appeal by first appellate authority due to non-compliance of stay order.
3. Liability of appellant to pay service tax for organizing or participating in a business exhibition abroad.
4. Consideration of CBEC Circular No. 354/11/2011-TRU in the decision-making process.

Analysis:
1. The judgment pertains to a stay petition seeking the waiver of pre-deposit of service tax confirmed by the adjudicating authority. The appellant availed services from individuals located outside, triggering a reverse charge mechanism for service tax payment.

2. The first appellate authority dismissed the appeal solely due to non-compliance with the stay order. However, upon review, the Tribunal found that the matter required reconsideration by the first appellate authority as the order was passed based on the non-compliance issue.

3. The lower authorities concluded that the appellant organized a business exhibition abroad, making them liable to pay service tax under Section 66A of the Finance Act, 1994. The appellant contended that they only participated, not organized, in the exhibition. The Tribunal noted the distinction and highlighted the lack of consideration of this difference by the lower authorities. Additionally, the Tribunal emphasized the relevance of CBEC Circular No. 354/11/2011-TRU, stating that it should have been taken into account.

4. Consequently, the Tribunal held that the appellant presented a case warranting a review of the appeal on its merits by the first appellate authority. The impugned order was set aside, and the matter was remanded to the first appellate authority for a fresh consideration following the principles of natural justice, without requiring any pre-deposit from the appellant.

In conclusion, the appeal was allowed by way of remand, providing an opportunity for a comprehensive reevaluation of the issues at hand by the first appellate authority.