2013 (7) TMI 126 - AT - Service Tax

Rate of Service tax whether the rate of service tax applicable is one that is extant on the date of receipt of payments or the date the services were rendered - Held that - As decided in Delhi High Court in CST, vs. Consulting Engineering Services (I) Pvt. Ltd (2013 (1) TMI 434 - DELHI HIGH COURT) the provisions of Rule 5B of the Service Tax Rules, 1994 will apply as same came into effect on 01.04.2011 - Rule 4(a)(i) of the Point of Taxation Rules 2011 is not applicable because those Rules came into effect on 01.03.2011. Business auxiliary service Marketing support services Held that - As decided in Paul Merchants Ltd. vs. CCE, Chandigarh (2009 (7) TMI 736 - CESTAT, NEW DELHI) the services provided by the appellant therein constitute Business Auxiliary Service. Waiver of pre- deposit The court allowed the stay application and waiver of pre deposit of service tax.

Summary

Issues Involved:
1. Assessment of service tax liability under various heads.
2. Determination of the rate of service tax applicable.
3. Denial of benefit of abatement on civil construction activities.

Analysis:
1. The substantive appeal challenged an order-in-original assessing service tax liability, penalties, and interest. The service tax liability was assessed under three main heads: (a) marketing support services provided to a corporation, (b) demand due to a change in the service tax rate, and (c) denial of abatement on civil construction activities. The appellant contested the assessment, arguing that the services provided fell under export rules and that the rate of tax should be based on the date of service rather than payment. Additionally, the appellant claimed to have provided relevant information on the value of goods incorporated into construction work, which was allegedly not considered during adjudication.

2. The Tribunal referred to a previous judgment involving similar services to determine the nature of services provided by the appellant. Regarding the issue of the applicable rate of service tax, the Tribunal cited judgments from the Delhi High Court and the Gujarat High Court, establishing that the rate should be based on the date of service rather than payment. This clarification was crucial in resolving the dispute over the rate of service tax applicable to the appellant's transactions.

3. The Tribunal found that the appellant had indeed furnished relevant information on the value of goods incorporated into construction work, which was not adequately considered during adjudication. The Tribunal concluded that the appellant had a strong prima facie case for the grant of waiver of pre-deposit and a stay on further proceedings pending the appeal's disposal. The Tribunal's decision was based on the appellant's compliance with providing necessary information and the erroneous assumption made in the adjudication order regarding the information furnished.

4. Ultimately, the Tribunal granted the appellant's application for waiver of pre-deposit and a stay on further proceedings, acknowledging the appellant's compliance with providing relevant information and the errors in the adjudication order. The decision highlighted the importance of considering all relevant information provided by the appellant in assessing service tax liability and related penalties accurately.