2013 (12) TMI 740 - AT - Service Tax

Demand of service tax - Business Auxiliary Service - Benefit of Notification No. 8/2005 and Notification No. 6/2005 - Held that - service tax demand has been confirmed against the appellants under category of Business Auxiliary Service under clause V of the definition which covers the production of goods or processing of goods for or on behalf the clients. The activities undertaken by the appellants prima facie are covered under this clause of the definition of Business Auxiliary Service - Commissioner (Appeal) has granted the benefit of Notification No. 8/2005 dated 01.03.2005 but has not granted the benefit under Notification No. 6/2005 as amended on the ground that appellants have not produced any details of the value of taxable service provided by them. After going through Orders-in-Original and Orders-in-Appeal we find that in respect of first five appellants the value of taxable service provided by the appellants prima facie is much below the exemption limit. We are therefore of the view that the first five appellants have strong case for complete waiver of pre-deposit and stay of recovery against the dues till disposal of the appeal - Conditional stay granted.

Summary

Issues:
1. Tax demand and penalty imposition on appellants engaged in processing goods for a client under Business Auxiliary Service.
2. Challenge against the tax demand and penalties imposed by the original authority and confirmed by the Commissioner (Appeal).
3. Applicability of exemptions under Notification 8/2005 and Notification 6/2005 for small scale service tax providers.
4. Consideration of exemption limits and eligibility for waiver of pre-deposit and stay of recovery during the appeal process.

Analysis:
The judgment dealt with 8 stay petitions filed by different appellants challenging tax demands and penalties imposed under Business Auxiliary Service for processing goods for a client. The activities undertaken by the appellants were considered to fall under the definition of production or processing of goods for the client. The appellants claimed exemptions under Notification 8/2005 and small scale exemption under Notification 6/2005, which were not fully considered by the lower authorities.

In the case of the first five appellants, the value of taxable services provided was found to be below the exemption limit. Hence, they were deemed eligible for complete waiver of pre-deposit and stay of recovery during the appeal process. For Shri Avtar Singh Padam, partial tax liability was noted, and pre-deposit of a specific amount was ordered. Similarly, for Shri Paramjeet Singh, eligibility for small scale exemption was recognized for certain financial years, and a specific deposit amount was directed.

Regarding Shri Majister Singh, the demand amount was confirmed, but no benefit of exemptions was granted. Upon reevaluation, it was found that if the benefit of Notification 8/2005 was given, the tax liability would reduce significantly. Therefore, a revised deposit amount was specified for compliance. Upon due compliance by Shri Avtar Singh Padam, Shri Paramjeet Singh, and Shri Majister Singh, a waiver of pre-deposit and stay of recovery for the remaining dues was ordered until the appeal's disposal.