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of <h1>Appellant ordered to deposit Rs. 2,00,00,000 within 8 weeks pending appeal. Compliance crucial.</h1> The tribunal directed the appellant to deposit Rs. 2,00,00,000 within 8 weeks, staying the recovery of remaining service tax, interest, and penalties ... Waiver of pre-deposit - Non-payment of Service tax under various categories - Demand of Service tax along with interest and penalties - Import of taxable service under the category of event management service - Held that:- services received by the applicant from the overseas entities in connection with organizing annual summit in India will fall under the taxable service of 'event management' and the applicant is liable for such tax on reverse charge basis with effect from 18.4.2006. Therefore, waiver of pre-deposit of the confirmed Service tax dues cannot be made to the full extent under this category. Import of internet connectivity - Internet telecommunication services - Held that:- the applicants claim that their payment to US company should be considered as for renting of movable property appears, prima facie, not sustainable. The server placed outside are meant for internet connectivity services related cannot be considered as hiring of simple physical space for placing servers. Management consultancy services - Applicant claimed that they have acted as pure agent - held that:- the claim of applicant was not accepted by the adjudicating original authority. At the prima facie stage itself it is found that the merits of the case could not be categorically analysed without detailed examination of the terms of agreement and also the claim of applicants as being pure agent. The applicants appears to have an arguable case in this category. Business support services - providing infrastructure support to the corporate companies - Held that:- it is found that prima facie, the applicant failed to make out a case for waiver of pre-deposit of full dues. At this stage, appellant could not explain various categories of sharing expenses and how such sharing of expenses are not relatable to business support services. Certain infrastructure facility are shared and the final tax liability of the applicant on this count has to be seen after examining each type of expense shared by the corporate companies. As the applicant failed to make out a strong case for full waiver of adjudicated dues and no financial hardship pleaded, the appellant is to be directed to deposit an amount of ₹ 2,00,00,000/- (Rupees Two crores only) within 8 weeks. - Stay application disposed of by not granting full waiver Issues:1. Waiver of pre-deposit of adjudicated service tax due with interest and penalties.2. Demand of service tax under various categories of taxable services.3. Tax liability under event management services, import of internet telecommunication services, management consultancy services, and business support services.Analysis:1. The judgment pertains to two applications for waiver of pre-deposit against an order-in-original confirming service tax demand, interest, and penalties. The appellants were charged for non-payment of service tax under different categories. The confirmed demand amounted to Rs. 3,16,67,099 along with interest and penalties under various sections of the Finance Act, 1994.2. The service tax was mainly confirmed under categories such as event management services, import of internet telecommunication services, management consultancy services, and business support services provided to associated enterprises. The tax was demanded on reverse charge basis for overseas services and infrastructure support provided to corporate companies.3. The tribunal examined each category of demand separately. Regarding event management services, the tribunal found the services received from overseas entities fell under taxable event management services, making the applicant liable for tax on reverse charge basis. For internet telecommunication services, the claim that payment to a US company was for renting movable property was deemed unsustainable.4. In the case of management consultancy services, the claim of acting as a pure agent was not accepted initially. However, the tribunal found the applicant had an arguable case in this category, warranting further examination of the terms of agreement. Concerning business support services, the tribunal observed the applicant failed to provide a strong case for full waiver, especially regarding expenses shared with group companies.5. Ultimately, the tribunal directed the appellant to deposit Rs. 2,00,00,000 within 8 weeks, staying the recovery of remaining service tax, interest, and penalties pending appeal disposal. The decision was based on the specific findings for each category of demand, with no financial hardship pleaded by the appellant. Compliance was to be reported by a specified date.6. The judgment highlights the meticulous examination of each service category and the need for a strong case to warrant a waiver of pre-deposit. The decision underscores the importance of detailed analysis and compliance with tax regulations in adjudicating service tax disputes.
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