2013 (10) TMI 1435 - AT - Service Tax

Appellant granted exemption benefits for OIDARS services under Notification No. 13/2010-S.T. Stay granted to prevent undue burden.

The Tribunal ruled in favor of the appellant, considering them as the provider of OIDARS services and entitled to exemption benefits under Notification ... Treatment of recipient as provider under the reverse charge mechanism - entitlement to exemption under Notification No. 13/2010-S.T. (OIDARS and Business Auxiliary Services) - reverse charge under Section 65(105)(zh) read with Section 66A of the Finance Act, 1994 - waiver of pre-deposit and interim stay of adjudication proceedingsTreatment of recipient as provider under the reverse charge mechanism - entitlement to exemption under Notification No. 13/2010-S.T. (OIDARS and Business Auxiliary Services) - Whether the assessee, though a recipient of OIDARS from a foreign news agency, is to be treated as the provider for purposes of liability and thereby entitled to the exemption under Notification No.13/2010-S.T. for the period 2011-12. - HELD THAT: - The adjudicating authority held that the petitioner was a recipient and rejected the exemption claim. However, Section 66A(1)(b) treats a recipient, for the purposes provided, as the provider of taxable services; the reverse charge mechanism under Section 65(105)(zh) read with Section 66A makes the recipient liable to discharge service tax on remittances to the foreign supplier. The Central Government by Notification No.13/2010-S.T. exempted taxable services provided in relation to OIDARS and BAS by any Indian news agency, subject to conditions which the petitioner has complied with. On a prima facie consideration, therefore, the petitioner-though a recipient-must be regarded as the provider for the reverse charge liability and is prima facie entitled to the benefit of the exemption notification for the period 2011-12.On prima facie view, the petitioner is to be treated as provider for the relevant purpose and is prima facie entitled to the benefits of Notification No.13/2010-S.T. in respect of OIDARS for 2011-12.Waiver of pre-deposit and interim stay of adjudication proceedings - Whether pre-deposit should be waived and further proceedings under the adjudication order stayed pending disposal of the appeal. - HELD THAT: - Having taken the prima facie view favouring the petitioner on the entitlement to exemption and the legal characterisation of the recipient as provider under the reverse charge, the Tribunal found it appropriate to protect the assessee's position during the appeal process. In consequence, the Tribunal exercised its power to relieve the petitioner from making any pre-deposit required under the adjudication order and to stay all further proceedings stemming from that order until the appeal is finally decided.Pre-deposit waived in full and all further proceedings pursuant to the adjudication order stayed pending disposal of the appeal.Final Conclusion: The Tribunal granted full waiver of the pre-deposit and stayed further proceedings, having taken a prima facie view that the petitioner, though a recipient under the reverse charge, is to be treated as the provider and is prima facie entitled to the exemption under Notification No.13/2010-S.T. for the tax period 2011-12. Issues involved: Appeal against adjudication order confirming service tax for 'Online Information or Database Access or Retrieval' (OIDARS) and 'Sale of Space or Time for Advertisement' services.Issue 1: Taxability of OIDARS serviceThe appellant appealed against the adjudication order confirming service tax for OIDARS service provided by a foreign news agency. The appellant remitted charges to the foreign news agency for online information and database access, leading to a tax demand of &8377; 1,20,788. The appellant claimed exemption under Notification No. 13/2010-S.T., dated 27-2-2010, which exempts Indian news agencies from service tax for OIDARS services. The Central Government exempted OIDARS services provided by Indian news agencies subject to certain conditions, which the appellant fulfilled. However, the adjudicating authority rejected the claim, stating that the appellant was the recipient, not the provider of OIDARS. Section 66A(1)(b) treats a recipient as the provider of taxable services for certain purposes. The Tribunal held that the appellant, though a recipient, should be considered the provider of OIDARS and entitled to the benefits of the exemption notification.Issue 2: Stay of proceedingsBased on the above premise, the Tribunal granted a waiver of pre-deposit in full and stayed all further proceedings following the adjudication order until the appeal is disposed of. The Tribunal's decision was made to ensure that the appellant is not unduly burdened during the appeal process.In conclusion, the Tribunal ruled in favor of the appellant regarding the taxability of OIDARS service and granted a stay on further proceedings pending the appeal's disposal to prevent any adverse impact on the appellant during the legal process.