2013 (10) TMI 1239 - AT - Service Tax

Translation service - Business support service - Demand of service tax - Stay application - Held that - during the course of investigation, the appellant s representative had stated that they had consulted legal experts and received an opinion that the service provided by them is not covered by the business support service . Further, in the definition of business support service also, the translation as such does not figure as an individual category but has been held to be covered by other transaction processes. The appellant seem to have interpreted this term to mean the one similar to the earlier transactions mentioned in the service and basically they seem to think that translation is not a transaction. In our opinion, this kind of opinions and consideration of definition and consultation with legal experts can give a feeling that they are not liable to pay tax even though a tax payer who is responsible for paying, assessing service qualifying same and paying the tax, cannot be considered and cannot be allowed to take such a view without proper consultation and without proper appreciation of the facts - Prima facie case not in favour of assessee - Stay granted patially.

Summary

Issues:
1. Whether translation services provided by the appellant fall under the category of 'business support service' for service tax purposes.
2. Whether the extended period invoked for confirming the demand with interest and penalties is justified.
3. Whether the appellant's consultation with legal experts instead of the department is a valid defense against the extended period invocation.

Analysis:
1. The appellant, engaged in providing translation services in foreign languages, faced a service tax demand claiming that such services fall under 'business support service'. The Tribunal found that the appellant failed to establish a prima facie case on merits. The appellant's interpretation that translation is not a transaction under 'business support service' was deemed incorrect. Consultation with legal experts cannot absolve the taxpayer from their responsibility to assess and pay taxes appropriately. The Tribunal emphasized that proper consultation and understanding of facts are essential before concluding tax liability.

2. The Tribunal considered the invocation of the extended period for confirming the demand. While the appellant argued consultation with legal experts, the department contended that consulting them was necessary. The Tribunal held that a prima facie view against the appellant does not justify a limitation defense. Ultimately, the Tribunal directed the appellant to deposit a reduced amount, considering the already paid sum and exempt service tax liability for SEZ units, with a waiver of pre-deposit and stay against recovery during the appeal.

3. The Tribunal addressed the appellant's choice to consult legal experts instead of the department. The department argued that such consultation did not justify the extended period invocation. The Tribunal emphasized the importance of proper consultation with tax authorities. Despite the appellant's defense, the Tribunal found the extended period valid. However, the Tribunal accepted the reduced deposit offer, taking into account the already paid amount and exempt service tax liability, providing relief to the appellant during the appeal process.