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2008 (7) TMI 137 - AT - Service TaxApplicant is paying Service Tax in respect of crushing charges as business auxiliary service - but they are not paying in respect of loading or unloading and transportation charges on the ground that these services are provided by sub-contractors - in view of the terms and conditions of the agreement entered by the applicant with the service recipient, which is a composite contract, it is not a fit case for total waiver of demand of Service Tax
Issues:
Waiver of pre-deposit of duty and penalties for Service Tax on loading, unloading, and transportation charges in a composite contract. Analysis: The applicant sought a waiver of pre-deposit of duty amounting to Rs. 61,15,208/- and penalties related to Service Tax on loading, unloading, and transportation charges in a composite contract. The applicant contended that they were not liable to pay Service Tax as they subcontracted the loading, unloading, and transportation services, with the subcontractors paying the Service Tax. Additionally, the applicant claimed to have already paid around Rs. 9 lakhs. On the other hand, the Revenue argued that the composite contract included crushing of iron ore, loading, unloading, and transportation services, and the applicant was charging higher rates from the service recipient than what they were actually paying. The Revenue maintained that the applicant should be liable to pay Service Tax on the gross amount received by them. The Tribunal found that the applicant had entered into a composite contract for providing business auxiliary service, but they were not paying Service Tax on the loading, unloading, and transportation charges, citing that these services were provided by subcontractors. The terms and conditions of the agreement between the applicant and the service recipient indicated a composite nature of the contract. Consequently, the Tribunal ruled that it was not a suitable case for a total waiver of the Service Tax demand. The Tribunal directed the applicants to deposit an additional amount of Rs. Ten lakhs on top of the already deposited sum. The matter was scheduled to come up for reporting compliance on 15-9-2008.
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