TaxTMI 
TaxTMI 
2014 (7) TMI 586
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....law for consideration and determination by this Court. He submits that the CESTAT was not justified in directing predeposit of huge sum and particularly when there was a strong prima facie case. The basis on which the CESTAT proceeds is that there is no prima facie case. Whereas, it was established and proved prima facie that the point is debatable and arguable. It is not as if the material in that behalf has not been placed by the Appellant before the CESTAT. The Appellant did point out the conclusive findings in the final orders of the CESTAT itself. When the CESTAT had passed several orders in which the ownership of data was held to be essential prerequisite for being classified under the taxing entry in question, then, it was not justified in concluding that the point is still open. The CESTAT relied upon a differing opinion of one of it's member in that behalf. Mr.Dada would submit that in the lengthy order running into several pages the CESTAT has virtually foreclosed the issue. The CESTAT found that its earlier view that the ownership of data is a relevant factor, requires reconsideration. If that was the position and the matter was still at large before the CESTAT itsel....
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.... Profit & Loss account and balance sheet is not conclusive even on the point of financial hardship, then, the order under challenge does not require any interference. The Appeal does not raise any substantial question of law and it deserves to be dismissed. 6. With the assistance of the learned counsel appearing for the parties we have perused the order passed by the CESTAT. The order is passed on an application seeking waiver of predeposit. The Appeal before the CESTAT questions the order passed on the show cause notices. What has been alleged against the Appellants is that the Appellants did not pay service tax under the Reverse Charge Mechanism. That is amount paid to the Computer Reservation System (for short "CRS") companies under the taxing entry for "Online Information and Database Access or Retrieval Service". The details of show cause notices are set out in paragraph 19 of the present memo of Appeal. The show cause notices are dated 23.10.2008, 23.06.2009, 20.08.2010, 21.10.2011 and 04.12.2012. They pertain to the period commencing from 2003 onwards till 2011-2012. 7. The argument of Appellants in reply to these show cause notices was that the activity undertaken by the ....
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.... the Travel Agents a right to access the CRS servers. There is an arrangement pleaded between the Appellant and CRS companies. The consideration paid by the Appellant to the CRS companies interalia consists an amount per ticket booked by the Travel Agents using the CRS servers. The passengers can book the tickets either from the Appellant's own booking offices or through a travel agent. In the event, a passenger chooses to book the ticket through the Appellant's own booking offices, the ticket is booked by accessing the Sabre Server directly and updating the same with the passenger details. Further, in the event the tickets are being booked through a travel agent, the booking is carried out by the Travel Agent by accessing the CRS Servers. The relevant information provided by the Appellant is displayed on the CRS Servers through the Sabre Server. It is in these circumstances the Appellant alleged that it is the CRS servers which transmit to the Travel Agents the information relating to availability of seats or other information for the purpose of business. It is, therefore, the Appellant's own information which is part of the Participation Agreement entered into by the ....
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....ibunal to whom the notice was issued. The Appellant cannot be said to be providing the data or information over computer network. The Appellant does not control the traffic over this Wide Area Network and that responsibility lies with the Andhra Pradesh Technology Services Limited. It was argued that the computer network is analogous to highway which reaches various destinations and carries traffic. However, the Highway Authority does not set up distinction or permit or control the traffic. Similarly, the Appellant/ noticee does not put up for control data or voice traffic over this Wide Area Network. On the other hand, the Revenue argued that this is not a matter where the ownership could be said to be relevant factor. A plain reading of the entry, therefore, does not warrant any such distinction being made. The Revenue argued that in order to gain access to online information or data two things are essential, namely, one is network or the hardware which is the basic essentiality for transmission of the data and the other one is the software to carry out the operation of the access of database with the aid of the network. Both have to go hand in hand and if one of them fails the a....
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....etwork services including provision of wired or wireless telecommunication link between specified points for the exclusive use of the clients; - Data transmission services including provision of access to wired or wireless facilities and services specifically designed for efficient transmission of data; and - Communication through facsimile, pager, telegraph and telex." 13. In the above factual backdrop, the ownership of data was held to be relevant. It was held that whenever there is information or data retrieval the ownership becomes relevant. Just because the Appellant therein provided part of network equipment the responsibility for entire service was not that of the Appellant. 14. The Tribunal then relied upon this order, when it's Principal Bench at New Delhi in the case of Nestle India Limited v/s Commissioner of Central Excise, New Delhi reported in 2011 (22) STR 165 (Tri.Del.) at a prima facie stage held that the Globe Centre are not providing access to any data of their own except receiving the data from the Appellant/ Nestle India Limited and getting them processed as per the software in place and enabling them to retrieve their own processed data. That is how th....
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.... TIOL 1655 CESTAT-Mad and distinguished the same. 18. We have not been shown any judgment or principle of law which disables the Tribunal from undertaking this exercise even at a prima facie stage. To support that there is a strong prima facie case and for total waiver of condition of predeposit and unconditional stay of recovery that the Appellant invited attention of the Tribunal to the orders in the case of United Telecom and others. The Tribunal found that prima facie the facts in the case of Appellant are distinguishable from that of United Telecom (supra). We do not find any perversity in the approach of the Tribunal nor can it be held that the Tribunal's order is vitiated by error of law apparent on the face of record. By mere refusal to follow the final order passed, in the case of United Telecom (supra), but making a distinction from the facts of that case and the present Appellant, the Tribunal could have rendered and taken a different prima facie view. The Tribunal's finding in paragraph 5.6 that interim orders do not have a binding force nor can they be treated as binding precedents is supported even by the judgment of the Honourable Supreme Court in the case o....
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....ade on bank guarantees or securities. In that view of the matter as we said before, if we may venture to suggest for consideration by our learned brethren that this Court should refrain from passing any interim orders staying the realisations of indirect taxes or passing such orders which have the effect of nonrealisation of indirect taxes. This will be healthy for the economy of the country and for the Courts." 19. Pertinently this judgment of the Honourable Supreme Court was not noticed in the case of Wardha Coal Transport Pvt. Ltd. (supra) by the Division Bench. True it is that the Honourable Supreme Court holds that there is need for consensus in the matter of interim orders, but that is after observing and concluding that every Bench hearing the matter on the facts and circumstances of each case should have right to grant interim orders on such terms as it considers fit and proper. If it grants an interim order, it should have the right to vary or alter such interim orders. In these circumstances the Tribunal's approach in this case cannot be faulted. 20 Then, the Tribunal refers to it's own view and which is a matter of some debate. It has been urged that the order p....
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....1. The instrument of taxation is not merely a means to raise revenue in India; it is, and ought to be, a means to reduce inequalities. You don't tax a poor man. You tax the rich and the richer one gets, proportionately greater burden he has to bear. Indeed, a few years ago, the Income-tax Act taxed 94p out of every rupee earned by an individual over and above Rupees one lakh. The Estate Duty Act, no doubt since repealed, Wealthtax Act and Gifttax Act are all measures in the same direction. It is for this reason that while applying the doctrine of classification - developed mainly with reference to and under the concept of "equal protection of laws" Parliament - is allowed more freedom of choice in the matter of taxation visavis other laws. If this be the situation in the case of direct taxes, it should be more so in the case of indirect taxes, since in the case of such taxes the real incidence is upon some other than upon the person who actually makes it over to the State though, it is true, he cannot avoid the liability on the ground that he has not passed it on. In the matter of taxation it is, thus, not a question of power but one of constraints of policy - the interests of ....
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....tained in the Foreign Trade Policy. That is to the tune of Rs. 145 crores which is valid till 22.04.2015. The details of this Duty Credit Scrips were submitted before the Tribunal in the course of hearing and forms a part of the compilation at page 9. The Appellant undertakes to this Court to freeze or block or refrain from utilisation 50% of the said Scrips in the sum of Rs. 72.5 crores pending the hearing and final disposal of the Appeal before the Tribunal. 25. Mr.Jetly submits that just as the Government does not run on bank guarantees, equally such undertakings and which do not secure the demand at all, cannot serve the ends of justice. 26. As a result of the above discussion and finding that the Tribunal could have properly balanced the rights and equities that to a limited extent a case for interference in the impugned order and direction is made out. Though not treating this order as a precedent, but confining and restricting it to the facts and circumstances of the Appellant's case that we entertain this Appeal. We entertain it only on a limited point that when the Tribunal is exercising its discretion it ought to be present its mind that if there are conflicting opi....