2015 (6) TMI 915 - AT - Service Tax

Waiver of pre deposit - Market Research Agency service - Held that - prima facie the classification of the services rendered has been done on the basis of the service rendered under only one of the eleven agreements under which the services were rendered. - service held to be Market Research Agency service would amount to export of service. Consequently, the appellant has been able to make out a good case for granting waiver of pre-deposit as far as the demand under the said service (Rs.6,57,10,433/-) is concerned. As regards the remaining amount of demand, the appellant has not pressed for stay. - Decision in the case of SGS India Pvt. Ltd. (2014 (5) TMI 105 - BOMBAY HIGH COURT) followed - Partial stay granted.

Summary

Issues: Appeal against service tax demand for Market Research Agency service, input service credit, and Renting of Immovable Property Service.

Analysis:
1. Market Research Agency Service Demand: The appellant contested the service tax demand under Market Research Agency service, arguing that the service partially rendered abroad through submission of reports to foreign clients should be considered as export of service under Export Service Rules, 2005. The impugned order classified the services based on one agreement out of eleven. The Tribunal noted that the service falls under Section 65(105)(y) and Rule 3(1)(ii) of Export Services Rules, 2005, stating that if a taxable service is partly performed outside India, it shall be treated as performed outside India. Citing the case of CST, Mumbai Vs. SGS India Pvt. Ltd., where the Bombay High Court ruled that service tax was not applicable when the service was completed by delivering the report to foreign clients, the Tribunal held that the Market Research Agency service in question amounted to export of service. Accordingly, the appellant was granted a waiver of pre-deposit for the demand related to this service.

2. Input Service Credit and Renting of Immovable Property Service: The appellant did not press for a stay against the demands of input service credit and Renting of Immovable Property Service. Therefore, the Tribunal did not delve into these aspects further.

3. Order: The Tribunal ordered a pre-deposit of Rs. 10 lakhs with interest within four weeks, with compliance to be reported by a specified date. Pending compliance, the recovery of the remaining adjudicated liability was stayed during the appeal process. Failure to comply would result in the dismissal of the appeal for non-payment of the pre-deposit amount.