2014 (2) TMI 855 - AT - Service Tax

Demand of service tax - Goods Transport Agency Service - Appellant contends that the services of GTA were received by NEPC Wind Energy Division and not by the appellants - Held that - appellants have not made out a prima facie case for total waiver of predeposit because the payments for the services in question were made by the appellant complying that they have received the service - Conditional stay granted.

Summary

Issues:
1. Liability of service tax on services received under a slump sale agreement.
2. Applicability of Service Tax Rules 2(1)(d)(v) regarding liability for service tax.
3. Dispute over payment of service tax for services of Goods Transport Agency and consulting engineer service located abroad.

Analysis:
1. The judgment deals with the liability of service tax on services received under a slump sale agreement. The appellants purchased the Wind Energy Division of M/s. NEPC India Ltd. and settled payments for services received by NEPC. The Revenue contended that the appellants should discharge service tax on these services. A show-cause notice was issued, resulting in a demand for payment along with interest and penalties for a specific period.

2. The main argument revolved around the interpretation of Service Tax Rules 2(1)(d)(v) regarding the liability for service tax. The appellant's counsel argued that the services of Goods Transport Agency (GTA) and consulting engineers located abroad were received by NEPC Wind Energy Division, not the appellants directly. On the other hand, the Revenue argued that as the successor-in-interest of the business, the appellants were the beneficiaries of the services and thus liable to pay service tax.

3. The Tribunal considered both sides' arguments and concluded that the appellants had not established a prima facie case for a total waiver of predeposit. Since the payments for the services were made by the appellants, indicating that they had received the services, the Tribunal directed the appellants to predeposit a specific amount within a set period. Upon compliance, the predeposit of the balance dues would be waived, and recovery stayed until the appeal's disposal.

This judgment clarifies the application of Service Tax Rules in the context of a slump sale agreement and addresses the issue of liability for service tax on services received under such agreements. It emphasizes the importance of establishing a prima facie case when seeking a waiver of predeposit in tax disputes.