2014 (12) TMI 744 - AT - Service Tax

Waiver of pre deposit - Call center service - Bar of limitation - whether the appellant received the services in India, it is seen from the record that it is on the appellant s behest M/s Technion Communication Corporation rendered the Call Centre Services in Canada to M/s Monster Inc. - Held that - M/s Technion Communication Corporation had raised bills on the appellant for the services provided and the appellant had made payments for the services rendered. In these set of circumstances, it is evident that it is the appellant who is recipient of the services and not M/s Monster Inc. Therefore, in terms of Section 66A, the appellant would be liable to pay service tax on the services received. - it is the contention of the appellant that the demand is time barred inasmuch as early as in November 2007, the appellant had furnished details of the services received and the payments made. In spite of such details available with the department as early as in 2007, the Show Cause Notice was issued only in November 2011. Prima facie , the demand appears to be time-barred. Therefore, the appellant has made out a prima facie case for grant of stay. - Stay granted.

Issues:
1. Confirmation of service tax demand for the period 2006-07 to 2008-09 along with interest and penalty.
2. Whether the services received by the appellant are taxable in India or not.
3. Whether the demand is barred by limitation.
4. Grant of stay on the demand during the pendency of the appeal.

Analysis:

Confirmation of Service Tax Demand:
The appeal and stay petition were filed against the Order-in-Original confirming a service tax demand of Rs. 3,13,81,416 for the period 2006-07 to 2008-09, along with interest and penalty under Section 78 of the Finance Act, 1994. The appellant contested the demand, arguing that the services rendered abroad to M/s Monster Inc. by a Canadian company were not taxable in India as the ultimate recipient was M/s Monster Inc. The appellant maintained that the demand was unjustified.

Taxability of Services Received:
The appellant contended that since the services were rendered abroad and the ultimate recipient was M/s Monster Inc., the transaction should not be taxable in India. However, the records indicated that the services were provided to the appellant by the Canadian company, and the appellant made payments for these services. It was established that the appellant was the recipient of the services and, therefore, liable to pay service tax under Section 66A of the Finance Act, 1994.

Limitation of Demand:
The appellant argued that the demand was time-barred as they had furnished details of services received and payments made as early as November 2007. Despite this, the Show Cause Notice was issued only in November 2011, raising concerns about the limitation period. The Tribunal acknowledged the prima facie case for granting a stay on the demand during the appeal process due to the apparent time-bar issue.

Grant of Stay:
Considering the arguments presented by both parties, the Tribunal found that the appellant had established a prima facie case for the demand being time-barred. As a result, the Tribunal granted a waiver from pre-deposit of dues adjudged in the Order-in-Original and stayed the recovery of the demand during the pendency of the appeal, providing relief to the appellant.

In conclusion, the Tribunal addressed the issues of service tax demand confirmation, taxability of services received, limitation of demand, and the grant of stay, ultimately ruling in favor of the appellant on the basis of the prima facie time-bar argument, allowing for a waiver from pre-deposit and stay on recovery during the appeal process.

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