Tribunal grants waiver on service tax demand, interest, penalties. Recovery stayed pending appeal. Appeal set for final hearing.

The tribunal granted a complete waiver of the pre-deposit of service tax demand, interest, and penalties imposed against the applicants. The recovery of dues was stayed pending appeal, and the appeal was scheduled for a final hearing on a specified date due to the significant revenue involved.

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Issues:
1. Waiver of pre-deposit of service tax demands confirmed under "Business Auxiliary Services" and "Business Support Services".

Analysis:
The judgment pertains to the waiver of pre-deposit of service tax demands confirmed against the applicants under the categories of "Business Auxiliary Services" and "Business Support Services." The first issue addressed is regarding IPO Financing Fees. The demand was confirmed against the applicants for IPO finance under "Business Auxiliary Services." The applicants were financing their clients through Non-Banking Finance Companies (NBFCs) and sharing the income of interest earned by these NBFCs on a revenue-sharing basis. The department contended that the applicants were promoting the business of the NBFCs, thus falling under "Business Auxiliary Services." However, the tribunal found that the applicants were not acting as commission agents but were doing business on a principal-to-principal basis, sharing profits. Consequently, the tribunal held that the applicants were not rendering any service under "Business Auxiliary Services," warranting a waiver of pre-deposit.

Moving on to the second issue of Processing Fee, the applicants collected money on behalf of a company issuing IPOs and deposited it in a designated bank. The revenue claimed that this activity promoted the business of banks, making the applicants liable for service tax under "Business Auxiliary Services." The tribunal observed that the interest income shared by the bank with the applicants was not due to promoting the bank's services. Therefore, the tribunal concluded that the applicants were not liable to pay service tax under this category, justifying a 100% waiver of pre-deposit.

Lastly, the issue of Recovery of Common Expenses was considered. The expenses recovered by the applicants from co-users of premises were deemed by the department as infrastructural support services falling under "Business Support Services." However, the tribunal found that the applicants were not providing any service, as they were merely recovering expenses incurred on all premises from co-users based on actual usage. Consequently, the tribunal ruled in favor of a 100% waiver of pre-deposit for this issue as well.

In conclusion, the tribunal granted a complete waiver of the pre-deposit of service tax demand, interest, and penalties imposed against the applicants. The recovery of dues adjudged in the impugned order was stayed during the pendency of the appeal. Additionally, due to the substantial revenue involved, the appeal was directed to be listed for final hearing on a specified date.

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