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TMI Blog2014 (7) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable event does not arise in the case of services rendered outside India by an agent outside India. There are two important expressions in Section 35-F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka, (1993 (3) TMI 350 - SUPREME COURT OF INDIA) that under Indian conditions expression undue hardship is normally related to economic hardship. Undue which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. Order of Tribunal is modified that the Tribunal was not justified in ordering the pre-deposit in the manner stated in its order dated 10.6.2013; however, assessee is directed to make a pre-deposit of ₹ 50,00,000 towards pre-deposit on or before 8.8.2014 and subject to such compliance, as stated in the order of the Tribunal dated 10.6.2013, the pre-deposit of balance amount demanded shall remain waived and its collection shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver of pre-deposit of duty. 5. The contention of the appellant is that the Section 66 A of the Finance Act, 1994 provides for payment of service tax on services received from outside India, which reads as follows: Charge of service tax on services received from outside India. 66A. (1) Where any service specified in clause (105) of section 65 is- (a) provided or to be provided by a person who has established a business or has a fixed establishment from which the service is provided or to be provided or has his permanent address or usual place of residence, in a country other than India, and (b) received by a person (hereinafter referred to as the recipient) who has his place of business, fixed establishment, permanent address or usual place of residence, in India, such service shall, for the purposes of this section, be the taxable service, and such taxable service shall be treated as if the recipient had himself provided the service in India, and accordingly all the provisions of this Chapter shall apply: Provided that where the recipient of the service is an individual and such service received by him is otherwise than for the purpose of use in any business or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with various banks for the running of the business, which is referred to in page Nos.69 to 72 of the typed set of papers. Therefore, the appellant has no financial liquidity to pay the demand and, therefore, the plea of undue hardship has not been properly considered. In any event, the primary issue that has to be considered should be interpreted in favour of the appellant by granting waiver of pre-deposit. 10. We heard Mr.Arvind P.Datar, learned Senior Counsel appearing for the appellant and Mr.V.Sundareswaran, learned Standing Counsel appearing for the first respondent. 11. The primary issue in this case is as to whether the provisions of Section 66A of Finance Act, 1994 and Rule 3 of the Taxation of Services (Provided from outside India and Received in India) Rules, 2006, would be applicable in respect of payments made by the assessee to foreign agents, who had rendered such service abroad and there is no element of receipt of service into India. This primary issue has to be gone into by the Tribunal in the appeal. The issue is purely legal in the face of the admitted facts as above. We find much force in the argument of the learned Senior Counsel appearing for the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act reads as follows: 35-F. Deposit, pending appeal, of duty demanded or penalty levied. Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise Authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied: Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of the Revenue: Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant regarding undue hardship and financial difficulty in pursuing the appeal on payment of the pre-deposit as ordered by the Tribunal. The same, therefore, requires to be modified considering the prima facie case of the appellant. 16. For the foregoing reasons, we pass the following order: (i)On the question of law raised, we are of the view that the Tribunal was not justified in ordering the pre-deposit in the manner stated in its order dated 10.6.2013; (ii)Consequently, the order of the Tribunal dated 10.6.2013 is modified to the effect that the appellant shall make a pre-deposit of ₹ 50,00,000/- (Rupees Fifty Lakhs only) towards pre-deposit on or before 8.8.2014 and subject to such compliance, as stated in the order of the Tribunal dated 10.6.2013, the pre-deposit of balance amount demanded shall remain waived and its collection shall stand stayed during the pendency of the appeal before the Tribunal; and (iii)The order of the Tribunal dated 24.3.2014 dismissing the appeal for non-compliance of the stay order is set aside and the appeal is restored to the file of the Tribunal. In the result, these appeals are ordered in the above terms. No costs. Conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X
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