2014 (1) TMI 254 - AT - Service Tax

Tribunal Grants Stay on Service Tax & Penalties, Rules in Favor of Appellant

UNIQUE FAMILY SERVICES Versus COMMR. OF C. EX. & ST., LUDHIANA

The Tribunal granted the appellant unconditional stay and dispensed with the pre-deposit of Service Tax and penalties amounting to Rs. 1,54,54,426 imposed ... Demand of service tax and equivalent penalty - Sub-agents services of corporate agent - Classification under Business Auxiliary Services - Held that:- classes are being conducted by him for his own workers who work as agents for him. The said services are not being provided to the general public at large as such they would not be covered by the definition of the said commercial coaching and training centre services - Following decision of Popular Vehicles & Services Ltd. v. CCE [2010 (2) TMI 650 - CESTAT, BANGALORE] - Stay granted. Issues:1. Dispensing with the condition of Service Tax and penalties imposed under Sections 76, 77, and 78 of the Finance Act.2. Applicability of Service Tax on sub-agents services provided by the appellant.3. Liability of the appellant regarding commercial coaching and training center services.Analysis:1. The appellant sought to dispense with the condition of Service Tax and penalties amounting to Rs. 1,54,54,426 imposed under various sections of the Finance Act. The Tribunal considered the appellant's plea and held that the appellant is entitled to unconditional stay at a prima facie stage based on relevant legal precedents.2. The issue of whether the appellant providing sub-agents services of a corporate agent falls under 'Business Auxiliary Services' liable to Service Tax was examined. The Revenue contended that such services are taxable. However, the appellant argued that the corporate agent, who receives commission from insurance companies, has already paid the Service Tax on the commission received, and any further demand on the sub-agent would be unfair. The Tribunal found merit in the appellant's argument and granted unconditional stay on the demand.3. A part of the demand, approximately Rs. 1.56 lakhs, was confirmed on the grounds that the appellant provided commercial coaching and training center services. The appellant clarified that these services were provided to his own workers who act as agents for him, not to the general public. The Tribunal agreed with the appellant's contention, holding that such services do not fall under the definition of commercial coaching and training center services applicable for taxation. Consequently, the Tribunal dispensed with the pre-deposit of Service Tax confirmed against the appellant and stayed the recovery of the same during the pendency of the appeal.This judgment highlights the Tribunal's consideration of the appellant's arguments regarding the applicability of Service Tax on sub-agents services and commercial coaching and training center services. The decision to grant unconditional stay and dispense with the pre-deposit of the tax and penalties reflects a balanced approach in assessing the legal obligations of the appellant under the Finance Act.