2013 (11) TMI 556 - AT - Service Tax

Demand of service tax - Business Auxilliary Service - Availment of CENVAT Credit - Assessee not a registered company - Services of technical inspection and certification - Held that - revenue contended that appellants had paid the tax by utilizing CENVAT credit for payment of taxes on Business Auxiliary Services and since at that time they were not registered, CENVAT credit available in their books could not have been utilized. - there is no provision restricting the credit to the person who is registered only. - benefit of credit allowed. Technical inspection and certification services - Held that - Commissioner has relied upon clause 8.1 of the agreement which provides for inspection of the fields by the officers of the company and puts a condition on the farmers to allow the officials of the company to visit their farm and give advice. We find that there is no mention of any remuneration or fee for this service rendered by the appellant. On the other hand, we find that in para 3.1, there is a specific provision for charging fee and recovering same for giving technical advice. In fact, the learned advocate submitted that this amount demanded has been worked out on the basis of fee received by the appellant as per the clause 3.1 of the agreement. Therefore, we find that in the impugned order, demand has been confirmed on an activity for which no fee has been charged - appellant has made out a prima facie case in their favour. - stay granted.

Summary

Issues Involved:
1. Demand confirmation for business auxiliary service without payment of service tax.
2. Utilization of CENVAT credit without registration.
3. Service tax liability on technical inspection and certification services.
4. Prima facie sustainability of demand for import of intellectual property services.

Analysis:
1. The judgment addresses the demand confirmation of Rs.2.44 crores on the appellants for providing business auxiliary services without paying service tax. The tribunal found that the demand related to the import of intellectual property services could not be sustained as the amounts paid were for previous years, and the receivers were not liable before a certain date as per settled law.

2. Another issue discussed is the demand of over Rs.84 lakhs due to the appellants utilizing CENVAT credit for business auxiliary services when they were not registered. The tribunal upheld this reversal as the appellants had taken credit in accordance with the law, despite not being registered at that time.

3. The judgment also addresses a demand of over Rs.1.37 crores, contending that the appellants could not avail CENVAT credit without registration. The tribunal referred to a High Court decision and its own previous rulings to support the appellants' position, stating that the credit availed was proper based on the facts of the case.

4. Lastly, the tribunal considered a demand of service tax amounting to Rs.3,25,902 for technical inspection and certification services provided by the appellants. It was noted that the demand was based on an agreement clause that did not specify any remuneration or fee for the service. The tribunal found that the demand was confirmed for an activity where no fee had been charged, indicating a lack of basis for the demand.

In conclusion, the tribunal found in favor of the appellants on various grounds, including the sustainability of demands, utilization of CENVAT credit, and the lack of clarity regarding the service tax liability for certain services. As a result, the tribunal granted a waiver of pre-deposit and stayed the recovery of the balance dues during the appeal process.