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Issues: (i) Whether the demand of service tax of Rs. 3,14,50,459/-, said to relate to services rendered to recipients located outside India, was prima facie covered by export of service so as to justify waiver of pre-deposit. (ii) Whether the demand of service tax of Rs. 11,85,442/-, said to arise from representational services rendered before authorities in India, was prima facie exempt under Notification No. 25/2006 dated 13/7/2006 so as to justify waiver of pre-deposit.
Issue (i): Whether the demand of service tax of Rs. 3,14,50,459/-, said to relate to services rendered to recipients located outside India, was prima facie covered by export of service so as to justify waiver of pre-deposit.
Analysis: The services were stated to have been provided to recipients outside India and the consideration was received in foreign convertible exchange. The relevant FIRC documents were stated to be on record and the demand was not shown to have been disputed or verified on this aspect in the adjudication. On that prima facie material, the services were treated as export of service.
Conclusion: The demand of Rs. 3,14,50,459/- was held to be prima facie covered by export of service and pre-deposit was waived in respect of that amount.
Issue (ii): Whether the demand of service tax of Rs. 11,85,442/-, said to arise from representational services rendered before authorities in India, was prima facie exempt under Notification No. 25/2006 dated 13/7/2006 so as to justify waiver of pre-deposit.
Analysis: Although the consideration was not received in foreign convertible exchange and the services did not qualify as export of service on that footing, the services were described as representational services performed on behalf of a foreign client before governmental authorities in India. On that description, the services were treated as falling within the exemption notification.
Conclusion: The demand of Rs. 11,85,442/- was held to be prima facie not leviable and pre-deposit was waived in respect of that amount.
Final Conclusion: The entire pre-deposit of service tax, interest, and penalties was waived and recovery was stayed during the pendency of the appeal.
Ratio Decidendi: For stay purposes, services rendered to overseas recipients against foreign exchange may be treated as export of service, and representational services may attract exemption where the notification squarely applies on the prima facie facts.
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