Appellant must deposit 50% of duty within 8 weeks for waiver of pre-deposit and stay on recovery

The Tribunal directed the appellant to deposit 50% of the demanded duty within eight weeks, with compliance due by a specified date. Upon this deposit, the pre-deposit of the remaining duty amount would be waived, and recovery stayed during the appeal's pendency.

---

---

Issues:
Interpretation of Notification No. 13/2003-S.T. for exemption from service tax on Business Auxiliary Services related to agriculture produce.

Analysis:
The appellant sought to dispense with the pre-deposit of service tax confirmed against them by the impugned order-in-revision. The appellants had filed a refund claim based on the exemption provided by Notification No. 13/2003-S.T., which exempts Business Auxiliary Services by a commission agent in the sale or purchase of agriculture produce from service tax. The appellants, engaged in rice export, had utilized overseas commission agents for order procurement. The liability to pay service tax, as per Section 66A(1) of the Act, rested on the recipient of the service, leading the appellant to pay the tax.

The original Adjudicating Authority had granted the refund claim by applying the benefit of the said notification. However, the Commissioner, in the impugned order, reversed this decision, prompting the present appeal. The central issue revolved around whether the appellants qualified for the scope of the notification. The notification's explanation clarified that the agricultural produce's processing must be done by the cultivator to avail the exemption. As the appellants were not cultivators but rice producers/exporters, it was prima facie determined that they did not qualify for the notification's benefit.

Consequently, the Tribunal directed the appellant to deposit 50% of the demanded duty within eight weeks, with compliance due by a specified date. Upon this deposit, the pre-deposit of the remaining duty amount would be waived, and recovery stayed during the appeal's pendency. The decision was dictated and pronounced in open court by the Tribunal members.

---