2013 (10) TMI 588 - AT - Service Tax

Appellant granted waiver in Service Tax dispute. High Court judgment settles gross value issue. Joint disposal ensures fairness.

The Tribunal allowed the appellant's application for waiver of pre-deposit in a Service Tax dispute, finding the amount already deposited sufficient for ... Reimbursement of Postage Expenses - The issue involved in the case was regarding the non-inclusion of the postage expenses claimed as reimbursement by the appellant in the gross value for discharge of Service Tax liability – Held that:- The issue of non-inclusion of reimbursable charges in the gross value for discharge of Service Tax liability seems to be settled by the judgment of Hon'ble High Court of Delhi in the case of Intercontinental Consultants & Technocrats Pvt. Ltd. Vs UoI [2012 (12) TMI 150 - DELHI HIGH COURT] and M/s. Datamatics Financial Services Ltd. Versus Assistant Commissioner of Income tax –Range 8(1) [2012 (8) TMI 487 - ITAT, MUMBAI] had granted an unconditional waiver - Since the issue involved in this case was debatable and arguable one, we consider the amount pre-deposited by the appellant on the direction of first appellate authority as enough to hear and dispose the appeal - Stay granted. Issues involved:1. Non-inclusion of postage expenses claimed as reimbursement in the gross value for discharge of Service Tax liability.2. Whether the appellant's pre-deposit of the Service Tax liability amount is sufficient for hearing and disposing of the appeal.Analysis:Issue 1: Non-inclusion of postage expenses in Service Tax liability:The appellant, engaged in share transfer business, claimed deduction of postage charges as reimbursable from the client. The issue revolved around the non-inclusion of these charges in the gross value for Service Tax liability discharge. The appellant referred to a previous Stay Order where the entire Service Tax liability amount was directed to be deposited. However, citing a judgment by the Hon'ble High Court of Delhi in a related case, the appellant argued that Rule 5(1) of Service Tax Valuation Rules was ultra vires. The Tribunal noted the precedent set by the High Court and a similar case, granting an unconditional waiver in Datamatics Financial Service Ltd. case. Considering the debatable nature of the issue, the Tribunal allowed the appellant's application for waiver of pre-deposit, stating the amount already deposited as sufficient for the appeal's hearing and disposal.Issue 2: Sufficiency of pre-deposit for appeal proceedings:The Departmental Representative confirmed the appellant's deposit of the required amount. Upon careful consideration, the Tribunal found the issue of non-inclusion of reimbursable charges in the gross value for Service Tax liability to be settled by the High Court's judgment. Acknowledging the debatable nature of the issue and the precedent set by a co-ordinate Bench, the Tribunal deemed the pre-deposit amount adequate for hearing and disposing of the appeal. Consequently, the application for waiver of pre-deposit was allowed, and recovery of the amount stayed until the appeal's final disposal.The Tribunal directed the Registry to link this appeal with another related appeal for the same assessee, ensuring both cases are listed for disposal together in due course. The judgment, delivered by Mr. M.V. Ravindran, granted the waiver of pre-deposit based on the settled issue and the amount already deposited by the appellant, ensuring a fair hearing and disposal of the appeal.