2015 (12) TMI 149 - AT - Service Tax

Waiver of pre deposit - Non discharge of the service tax liability on the amounts received from M/s. ONGC for the services rendered - inclusion of expenses incurred by the client directly - Held that - Entire order of the adjudicating authority is misdirected. It is on record that the appellant is providing services to ONGC for security purposes as deployment charges. M/s. ONGC has directly made the payment to the various service providers like telephone companies, rent a cab services, insurance services, health services for the facilities extended to CISF. There is nothing on record to indicate that CISF has billed ONGC for all these charges which were incurred directly by the ONGC. In our view, these charges cannot be considered as an amount that needs to be included in the services provided by CISF to ONGC. Prima facie, we find that the appellant had made out strong case for the waiver of the pre-deposit of the amounts involved - Stay granted.

Summary

Issues:
1. Waiver of pre-deposit of differential service tax liability confirmed on the appellant.
2. Correct discharge of service tax liability on amounts received from M/s. ONGC for services rendered.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved a stay petition for the waiver of pre-deposit of a confirmed differential service tax liability on the appellant. The adjudicating authority had upheld the demands on the appellant, alleging incorrect discharge of service tax liability on amounts received from M/s. ONGC for services rendered. Upon hearing both sides and examining the records, the Tribunal found that the adjudicating authority's order was misdirected. It was noted that the appellant provided services to ONGC for security purposes as deployment charges, and ONGC directly paid various service providers for services like telephone, rent-a-cab, insurance, and health services for facilities extended to CISF. The Tribunal observed that there was no evidence to suggest that CISF billed ONGC for these charges incurred directly by ONGC. Consequently, the charges paid by ONGC to third-party service providers could not be considered as part of the services provided by the appellant to ONGC. The Tribunal held that the appellant had presented a strong case for the waiver of the pre-deposit of the amounts involved.

Therefore, the Tribunal allowed the application for the waiver of the pre-deposit of the amounts in question and stayed the recovery until the appeal's final disposal. This judgment highlights the importance of correctly assessing service tax liabilities and the necessity for a clear demonstration of the services provided to avoid undue financial burdens on taxpayers.