2011 (4) TMI 913 - AT - Service Tax

Tribunal Grants Waiver of Pre-Deposit for Service Tax Appeal

The Tribunal granted the appellant's application for waiver of pre-deposit of the Service Tax amount and interest under Section 75 of the Finance Act ... Service tax liability for the services received from abroad - Waiver of pre-deposit - Held that:- In a recent judgment arising out of a SLP filed before the Hon'ble Supreme Court in the case of Commissioner Vs. Bhandari Hosiery Exports Ltd. [2010 (10) TMI 907 - SUPREME COURT] that till the time Section 66A was enacted i.e.earlier to 18.4.2006 only the person who rendered the service was liable to pay tax and not the recipient of the service from a person resident outside India - in favour of the assessee Issues:Service tax liability on services received from a person situated abroad.Waiver of pre-deposit of Service Tax amount along with interest u/s 75 of the Finance Act 1994.Analysis:Issue 1: Service tax liability on services received from a person situated abroadThe appellant filed a stay petition seeking the waiver of pre-deposit of Service Tax amount along with interest u/s 75 of the Finance Act 1994. The adjudicating authority confirmed the demand for Service Tax and interest, stating that the appellant received services from a person not situated in India, making them liable to pay Service Tax under the reverse charge mechanism from 01.01.2005. The appellant argued that recent judgments by the Hon'ble Supreme Court and High Courts favored their position, indicating that prior to 18.04.2006, the service tax liability did not arise in the hands of the recipient of services from abroad. The Tribunal noted that their consistent view was supported by the High Court of Karnataka and the Hon'ble Supreme Court, affirming that the appellant had a prima facie case for the waiver of pre-deposit of the amounts involved. Consequently, the Tribunal allowed the application for waiver and stayed the recovery of the amounts until the appeal's disposal.Issue 2: Waiver of pre-deposit of Service Tax amountThe appellant sought the waiver of pre-deposit of the Service Tax amount along with interest under Section 75 of the Finance Act 1994. After hearing both parties and examining the records, the Tribunal considered the arguments presented. The appellant relied on legal precedents and judgments to support their case, emphasizing that the service tax liability on services received from a person situated abroad did not arise prior to a certain date. The Tribunal, after thorough consideration, found that the appellant had made out a prima facie case for the waiver of pre-deposit of the amounts involved in the case. Therefore, the Tribunal allowed the application for waiver and stayed the recovery of the amounts until the appeal's final disposal.This detailed analysis of the judgment highlights the issues of service tax liability on services received from abroad and the waiver of pre-deposit of the Service Tax amount, providing a comprehensive understanding of the Tribunal's decision and the legal reasoning behind it.