2014 (5) TMI 258 - AT - Service Tax

Waiver of pre deposit - demand of Service Tax - Business Auxiliary Service - Held that - Prima facie the activity of MKCL is not in the nature of business. Therefore, the service rendered by the applicant prima facie does not fall under Business Auxiliary Service. Accordingly, we waive the requirement of pre-deposit of entire amount of Service Tax, interest and penalty and stay recovery thereof during the pendency of the appeal - Stay granted.

Summary

Issues:
Waiver of pre-deposit of Service Tax demand under Business Auxiliary Service category.

Analysis:
The judgment revolves around the issue of seeking a waiver of pre-deposit of the impugned demand confirmed against the applicant in relation to services provided to Maharashtra Knowledge Corporation Ltd. (MKCL) under the category of Business Auxiliary Service. The applicant contended that their activity does not fall under Business Auxiliary Service, leading to the need for a waiver of the pre-deposit requirement.

The Tribunal carefully examined the services rendered by the applicant to MKCL and the nature of MKCL's activities. Upon prima facie evaluation, it was observed that MKCL's activities were not in the nature of a business. Consequently, the services provided by the applicant did not prima facie fall under the ambit of Business Auxiliary Service. In light of this analysis, the Tribunal decided to waive the necessity of pre-deposit of the entire amount of Service Tax, interest, and penalty. Furthermore, the Tribunal ordered the stay of recovery during the pendency of the appeal, indicating a favorable outcome for the applicant based on the nature of services provided and the activities of MKCL.

In conclusion, the judgment provides a detailed analysis of the services offered by the applicant to MKCL, the nature of MKCL's operations, and the applicability of the Business Auxiliary Service category. By carefully considering these aspects, the Tribunal reached a decision to grant the waiver of pre-deposit and stay recovery of the demanded amounts during the appeal process. The judgment highlights the importance of a thorough examination of the factual and legal aspects to determine the applicability of tax liabilities and the necessity of pre-deposit requirements in such cases.