2015 (9) TMI 638 - HC - Service Tax

Waiver of pre deposit - Manpower supply service - Held that - Tribunal ought not to have granted absolute waiver and also stay of recovery without imposing any condition, does not merit any consideration in the facts of the case. The Tribunal had taken into consideration of the fact that the issue with regard to similar circumstances was already the subject matter of two decisions of the Tribunal at Delhi, stated supra. In that view of the matter, when the issue is squarely covered, there would be no justification for directing a pre-deposit. Hence, we see no illegality or infirmity in the impugned order. - Decided against Revenue.

Summary

Issues:
1. Tribunal granting stay of recovery and waiving pre-deposit in appeal against Service Tax demand.
2. Interpretation of agreement between Indian and Japanese companies regarding deputation of employees.
3. Consideration of previous Tribunal decisions in similar cases.
4. Validity of Tribunal's decision to grant waiver and stay without conditions.

Analysis:
1. The High Court of Andhra Pradesh heard an appeal by the Revenue against a CESTAT order granting stay of recovery and waiving pre-deposit in a case involving a Service Tax demand against an Indian company. The Tribunal had allowed the stay petition filed by the assessee, who had entered into an agreement with a Japanese company for deputation of employees, leading to the initiation of proceedings by the Department for Service Tax payment.

2. The Court examined the nature of the agreement between the Indian and Japanese companies, where employees were deputed to work in India. The Department argued that this arrangement constituted receipt of manpower supply from Japan, triggering the Service Tax liability. However, the Tribunal found that the deputed employees were appointed by the Indian company and their salary, paid by the Japanese counterpart, was reimbursed on an actual basis. The Tribunal relied on previous decisions from the Tribunal at Delhi to support its interpretation.

3. In its analysis, the Court considered the Department's contention that the Tribunal should not have granted a complete waiver and stay without imposing any conditions. However, the Court found that since the issue was similar to cases previously decided by the Tribunal at Delhi, where no pre-deposit was directed, there was no justification for imposing one in this case. The Court upheld the Tribunal's decision, stating that there was no illegality or infirmity in the impugned order.

4. Consequently, the appeal by the Revenue was dismissed, and the Tribunal was directed to expedite the disposal of the appeal related to the period 2008-09 to 2011-12 within six months. The Court concluded by stating that no costs were to be awarded, and any pending miscellaneous petitions in the appeal were to be closed.