2011 (5) TMI 799 - AT - Service Tax

Appellant's Provision of Bed Rolls Classified as Business Auxiliary Services, Tribunal Orders Pre-Deposit

The Tribunal found that the appellant's provision of bed rolls to passengers of AC-II Tier and III-Tier coaches of Southern Railway fell under Business ... Stay petition - waiver of pre-deposit - Service Tax liability of the appellant on the provision of services of supplying of bed rolls to the passengers of the AC-II Tier and III-Tier coaches of Southern Railway - authority is of the view that the appellant has provided services, which would fall under the category of Business Auxiliary Services more specifically “Customer Care Services” provided for Railways – Held that:- services would be covered under the Business Auxiliary Services, appellant to pre-deposit an amount of Rs. 30,00,000, balance amounts involved is allowed and recovery thereof stayed till the disposal of the appeal Issues involved:1. Service Tax liability of the appellant on supplying bed rolls to passengers of AC-II Tier and III-Tier coaches of Southern Railway.2. Interpretation of the Agreement between the appellant and the Divisional Railway Manager, Palakkad Division, Southern Railway.3. Determination of whether the services provided by the appellant fall under Business Auxiliary Services specifically 'Customer Care Services' for Railways.4. Assessment of the prima facie case for a complete waiver of the amounts involved in the case.Analysis:Issue 1: Service Tax liabilityThe case revolves around the Service Tax liability of the appellant concerning the provision of services supplying bed rolls to passengers of AC-II Tier and III-Tier coaches of Southern Railway. The adjudicating authority contends that the services provided by the appellant fall under Business Auxiliary Services, particularly 'Customer Care Services' for Railways.Issue 2: Interpretation of AgreementThe learned Chartered Accountant representing the appellant argues that as per the Agreement, the appellant is solely supplying bed rolls to the Railways without providing any additional services. However, the Tribunal notes that the appellant is collecting a specific amount per bed per passenger per day from the Southern Railway, indicating a service provision aspect that needs further examination based on the Agreement's clauses.Issue 3: Classification of servicesThe learned JCDR asserts that the services rendered by the appellant align with Business Auxiliary Services, specifically 'Any Customer Care Services' provided on behalf of the client, which adds complexity to the classification of the services provided by the appellant.Issue 4: Prima facie case for waiverUpon considering the submissions from both sides and reviewing the Agreement between the parties, the Tribunal finds that the appellant has not established a strong prima facie case for a complete waiver of the amounts in question. Consequently, the Tribunal directs the appellant to pre-deposit a specific amount within a stipulated timeframe, with a stay on the recovery of the remaining balance pending the appeal's disposal.In conclusion, the Tribunal's decision underscores the need for a detailed examination of the Agreement, the nature of services provided, and the classification under Business Auxiliary Services to determine the Service Tax liability of the appellant. The order highlights the importance of establishing a prima facie case for the waiver of pre-deposit amounts and sets a specific pre-deposit requirement for the appellant in this case.