2013 (8) TMI 87 - AT - Service Tax

Waiver granted for service tax liability on Computer Linkage charges due to uncertainty.

The Tribunal allowed the appellant's application for waiver of pre-deposit of service tax liability, citing uncertainty regarding the taxability of ... Stay application – Waiver of pre-deposit - Amount collected by the appellant as Computer Linkage Charges from his customers and paying the same to the Commodity Exchange - Demand of service tax liability is on the amount collected by the appellant – Held that:- Issue involved in this case is debatable one - Collecting the charges by the appellant from his customers and paying the same to Commodity Exchange for Computing Linkage, prima-facie, will not fall under the category of Stock Broker Services - Appellant has made out a prima facie case for the waiver of pre-deposit of amounts involved – Waiver of pre-deposit allowed – Stay allowed. Issues:Waiver of pre-deposit of service tax liability, applicability of Service Tax Valuation Rules, interpretation of charges collected by the appellant, categorization of services provided.Analysis:The appellant filed a stay petition seeking the waiver of pre-deposit of an amount along with interest and penalties imposed by the adjudicating authority and upheld by the first appellate authority. The appellant argued that the service tax liability was based on the amount collected as Computer Linkage Charges from customers and paid to the Commodity Exchange. The appellant contended that they did not collect more than what was paid to the Commodity Exchange, considering it as reimbursable expenses. The appellant referenced a case where the gross value determination under Service Tax Valuation Rules had been struck down by the High Court. However, the departmental representative claimed that the appellant had indeed collected these charges from clients without paying the service tax liability as recorded in the order.Upon reviewing the submissions and records, the Tribunal found the issue to be debatable. It was noted that the appellant had only collected charges to pay to the Commodity Exchange, with uncertainty regarding any service tax liability on the Commodity Exchange for the services provided. The Tribunal opined that the collection and payment of charges for Computing Linkage did not seem to fall under Stock Broker Services. Consequently, the Tribunal concluded that the appellant had established a prima facie case for the waiver of pre-deposit of the amounts involved. As a result, the application for the waiver was allowed, and the recovery was stayed pending the appeal's disposal.This judgment highlights the importance of analyzing the nature of charges collected, the applicability of relevant tax rules, and the interpretation of services provided to determine the liability and eligibility for the waiver of pre-deposit in tax matters.