2014 (3) TMI 116 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Consulting engineers service - Held that - prime consultant, to whom the appellant provided consulting engineers service and from whom the consideration for such service was collected, has declared that they collected service tax from NHAI and deposited the same to the Central Government in respect of the service rendered from 2004 to 2007 - prima facie case found for the appellant - Stay granted.

Summary

Issues:
Waiver and stay of adjudged dues for consulting engineers service; Liability of sub-consultants for service tax; Prima facie case for waiver and stay.

Analysis:
The appellant filed an application seeking waiver and stay of adjudged dues amounting to Rs.2,29,616/- for providing consulting engineers service from 2004-05 to 2007-08. The impugned demand was based on this service provided to various parties, including prime consultants who, in turn, provided services to Government agencies. The appellant claimed they were working as sub-consultants and thus not liable for service tax, citing Trade Notice No.53 CE(Service Tax)/97 and a Tribunal decision in BBR (India) Ltd. vs. CCE, Bangalore. The Additional Commissioner argued that the appellant couldn't evade tax liability without proof that prime consultants paid service tax. However, the appellant's consultant presented specimen copies of declarations issued by prime consultants, showing collection and deposit of service tax to the Central Government for the services rendered by the appellant.

The Judge, after considering the submissions, found a prima facie case in favor of the appellant. Consequently, waiver and stay were granted as requested. This decision highlights the importance of establishing the flow of service tax payments in complex service provider relationships, emphasizing the need for clear documentation and evidence to support claims of exemption from tax liability. The judgment also underscores the significance of precedents and official notifications in interpreting tax laws and determining liabilities in service-related disputes.