A] CLASSIFICATION OF SERVICE

Airport Service

1. The assessee owning and managing airport covered under definition of Airport Authority had collected user fee at flat rate of Rs. 500 from outgoing international passengers and not from passengers arriving from foreign destinations. The High Court observed that, the purpose of user fee was to augment revenue as per decision of Board of Directors and not for any specific service rendered to outgoing international passengers and held that, user fee collected only from one category of passengers at flat rate could not be considered as service charge liable to service tax under Airport service.

CCE vs. Cochin International Airport Ltd. 2009 (16) STR 401 (Ker.)

Banking & Other Financial Services

2. The Commissioner (A) in this case observed that, the appellant being co-operative credit society was not a banking organization and was not governed by RBI Act. Non-banking financial company should have previous approval of Central Government, however no such approval was required in present case. It was held that, demand of service tax, interest and penalties under

Banking and Other Financial services was not sustainable.

In Re: Jankalyan Nagari Sahakari Patsanstha Ltd. 2009 (15) STR 603 (Commr. Appl.)

3. The High Court held that Service tax is levied on services and not on sale or purchase of goods. Service tax is on services and not on service provider. The Petitioners in this case rendered services and collected charges @ 1% on hire purchase and lease transactions and such service is liable to service tax under Banking and Other Financial services. Tax on sale of goods involved in sale does not mean that no service tax can be levied on service aspect. Policy of tax in its effectuation may bring some hardship in some individual cases but that is inevitable so long as law represents a process of abstraction from the generality of cases and reflects the highest common factor.

Madras Hire Purchase Association vs. UOI 2009 (16) STR 3 (Mad)

Business Auxiliary Service

4. The appellant rendered free service to customers in respect of Light Commercial Vehicles (transport vehicles) purchased during the warranty period. The Tribunal held that, such services were not liable to service tax under Business Auxiliary Services and expenses reimbursed by manufacturer in respect of free services were also not liable under Authorised Service Station in view of Boards Circular No. 87/05/2006-ST dated 6-11-2006.

Focuz Motors vs. CCEC& ST(A), Cochin 2009 (16) STR 42 (Tri-Bang.)

5. The Tribunal in this case held that, definition of manufacture under Section 2(f) of CEA, 1944 is an inclusive definition and electricity is manufactured goods therefore, production of electricity was not liable to service tax under Business Auxiliary service.

NTPC Sail Power Co. Pvt. Ltd. vs. CCE, Bolpur 2009 (16) STR 206 (Tri-Kolkatta.)

Commercial Training or Coaching Services

6. The appellant in this case collected Mess charges providing food to trainees. The Tribunal held that, nexus between amount collected and service rendered was required and Mess charges could not be considered as receipt for rendering Commercial Training or Coaching Service. It was further held that larger period was not invocable as show cause notice was issued based on audit objections.

Aditya College of Competitive Exam. vs. CCE, Visakhapatnam 2009 (16) STR 154 (Tri-Bang.)

Intellectual Property Service

7. Appellant, a manufacturer of medicines under an agreement with a Swiss Company received ‘knowhow’ in the form of information, data, drawing, secret formula etc. under its own brand name in India and paid royalty for a period of 10 years or more for the know-how. Service tax was demanded on royalty payment paid as receiver of intellectual property service. After persuing the agreement and show cause notice, the Tribunal accepted the contention of the appellant that there was no finding as to receipt of know-how continuously. Payment whether made lump sum or on deferred basis for know-how received in 1990 could not determine the liability of service tax as no service was provided during the disputed period and allowed the appeal. Since the appeal was allowed on this short ground, other aspects of the applicable date for ‘reverse charge’ etc. were not gone into.

Modi Mundipharma P. Ltd. vs. CCE, Meerut 2009 (15) STR 713 (Tri.-Del.)

Maintenance or Repair Service

8. The AAR held that, re-rubberisation of used rollers of printing machine amounts to repair or reconditioning of goods and was covered under Management, Maintenance or Repair Service. Service tax liability will arose if reconditioning of old rollers undertaken under orders placed or instructions given by customer and re-rubberising charges collected. And, it was further held that, fundamental requirement for attracting charging section 66 of FA, 1994 is provision of service by one person to another and it should answer description and definition of taxable service falling within clause (105) of section 65.

In Re: Print Top Rubber Industries 2009 (15) STR 572 (AAR)

Management Consultancy Service

9. The Commissioner (A) held that, activity of liaisoning work between a sister concern and its clients viz. co-ordinating collection of purchase orders/payments/cheques, accounts reconciliations etc. did not amount to rendering of advice/consultancy and the same did not fall in definition of management consultants service.

In Re: Shanatala Marketing Services 2009 (15) STR 577 (Commr. Appl.)

Outdoor Catering Service

10. The appellant was engaged in preparing and serving food in customer’s premises. All the facilities relating to maintenance of canteen including furniture, utensils, gas and electricity was provided by the customer. The Tribunal held that, activity of the appellant did not fall under Outdoor Catering Service as appellant was engaged merely to prepare and serve food items in company’s premises.

Rajeev Kumar Gupta us. CCE, Jaipur 2009 (16) STR 26 (Tri-Del)

Rent-a-Cab Service

11. The appellant provided vehicles with driver for specific journey to specific destination. Revenue sought to tax them under Rent-a-Cab Service. The Tribunal held that, vehicle was used for fixed destinations by client and not covered under Rent-a-Cab Service.
CCE, Rohtak vs. Miglani Taxi Service 2009 (15) STR 559 (Tri-Bang.)

Security Agency Service

12. The Tribunal held that, activity of scare the birds in airport area by periodical firing at specified places is preventive measure in maintaining airport as per the norms to avoid accident by bird hit and such activity is not covered under Security Agency Service.
Ex-Servicemen Industrial Guards Pvt. Ltd. vs.CCE, Thiruvananthapuram 2009 (16) STR 421 (Tri-Bang.)

Stock Brokers Service

13. The Tribunal held that, department has already clarified that service tax was not payable on fees charged to the depositories and recovered from customers on actual basis and fixed charges collected by the appellant also represent actual charges paid to depositories, hence not liable to service tax.

Saurin Investments Pvt. Ltd. vs. CCE, Ahmedabad 2009 (16) STR 446 (Tri-Ahmd.)

Technical Inspection and Certificate Service

14. The appellant provided assistance in ISO certification by audit and assessment of quality management system. The Tribunal held that, the word ‘process’ appearing in statutory definition of Technical Inspection and Certificate Service was to be interpreted by applying principle of ejusdem generis. The term “process” in the definition was related to physical and chemical processes only and was not applicable to management relating to human beings. Certificate of quality management was not covered under above service.

American Quality Assessors (I) P. Ltd. vs. AC(ST), Hyd.-II 2009 (16)STR 413 (Tri-Bang.)

Tour Operator’s Service

15. The Tribunal held that, consideration received by booking agent for booking tickets for principal was not covered under Tour Operators Service for the period prior to 10-9-2004.

CCE, Jaipur vs. Kalpana Travels Pvt. Ltd. 2009 (16) STR 444 (Tri –Del.)

Works Contract

16. The appellant constructed raw water reservoir and its lining package. The Tribunal observed that, contract clauses revealed that, it was works contract and contract understood and acted upon by both parties as works contract and held that, it was futile to tax the said activity under service tax for period prior to 1-6-2007, as works contract service was not liable to service tax.

Soma Enterprises Ltd. vs. CCE&ST, Hyderabad 2009 (15) STR 559 (Tri-Bang.)

B] VALUATION

17. The department sought to include cost of paint used during body repair work of vehicles in taxable value of service. The assessee contended that value of paint was shown as 80% of total bill and sale tax was also paid thereon, hence service tax was not leviable when sale tax paid on sale of goods. The Tribunal held that, impugned issue was already settled by precedent decisions and value of paint was not includible in taxable value of service.

In Re: Cauvery Motors (P) Ltd. 2009(16) STR 355 (Commr. Appl.)

C] CENVAT CREDIT

18. The Tribunal held that credit of service tax paid on Xerox machine maintenance and repairs, which was installed in factory and mainly used for taking photographs of drawings and sketches and occasionally used for photocopying other administrative and market related papers was admissible. However, credit of service tax paid on photography services for taking photographs of activity of manufacturing as also of manufactured goods as part of marketing strategy is not admissible.

Parason Machinery (I) Pvt. Ltd. vs. CCE, Aurangabad 2009 (16) STR 20 (Tri-Mumbai)

19. The assessee availed CENVAT credit of service tax paid on mobile phones used by full time directors of the company. They had produced bank statement to show that payment of bills had been made by the company. The Tribunal observed that, mere payment of bills by company does not imply that services have been utilized by company, but statement on use for business activity by assessee was not refuted by Revenue with evidence. Hence, the order allowing credit was sustainable.

CCE, Raipur vs. BSBK Pvt. Ltd. 2009(16) STR 58 (Tri-Del.)

20. The appellant claimed abatement under Notification No. 18/2005-ST at the time of provision of service. By the time payment was received and tax liability arose, the said notification was superseded by Notification No. 1 /2006-ST. The Revenue denied the abatement as later notification did not allow availment of CENVAT credit. The Tribunal held that, taxable event, which was rendering of service was completed during the period prior to 1-3-2006 and for this period appellant was entitled to abatement and cenvat credit.

Santosh Associates vs. CST Ahmedabad 2009 (16) STR 87 (Tri-Ahmd.)

21. The Tribunal inter alia held that, security agency services provided for plant area, residential and mining area were covered under the category of specified services in rule 6(5) of CCR, 2004, therefore credit of service tax paid allowed.

GHCL Ltd. vs. CCE, Bhavnagar 2009(16) STR 89 (Tri-Ahmd.)

22. The appellant claimed credit of service tax paid on outdoor catering service received in canteen. They had produced certificate by Cost Accountant certifying that the cost of food paid by manufacturer forms cost of production of final goods. The Tribunal held that, outdoor catering service was input service relating to business and appellant had good case in view of Larger Bench decision in the case of GTC Industries Ltd. 2008 (22) STR 468 (T-LB).

Pudumjee Pulp & Paper Mills Ltd. vs. CCE, Pune-1 2009 (16) STR 91 (Tri-Mumbai)

23. The Tribunal held that, services such as repairs and maintenance, civil construction, manpower recruitment, cleaning service etc. provided to residential colony, which the appellant was required to maintain were related to business and hence credit of service tax paid thereon was admissible.

CCE, Nagpur vs. Manikgarh Cement 2009 (16) STR 171 (Tri-Mumbai)

24. The assessee claimed credit of service tax paid by service provider under the category of Business Auxiliary Service prior to 16-6-2005. However, according to the department the said service was correctly classifiable under another category namely ‘Manpower Recruitment and Supply Agency’ w.e.f. 16-6-2005. The Tribunal held that, assessee having paid service tax and taken credit on the basis of valid document, its eligibility to such credit could not be questioned on the basis that assessment of service by department was incorrect at the end of the service provider.

CCE, Chennai vs. Carborandum Universal Ltd. 2009 (16) STR 181 (Tri-Chennai)

25. The Tribunal held that late filing of declaration under Notification No. 12/2005-ST was only a procedural lapse and substantial concession was not deniable. Liberal view was to be taken in case of exports. The definition of term ‘Input Service’ was inclusive. Services used in connection in setting up of premises and services used in connection with repairs of premises were considered as input services. Services used for in-between activity namely day-to-day maintenance also to be considered as part of input service. Input services used in connection with procurement of other input services was to be treated as input services. Eligibility to credit of duty paid on inputs and tax paid on input services was not contingent on whether services were exported or not. Criteria for credit eligibility were same whether entire services are exported or same service was provided to domestic customers in full or in part.

CST, Delhi vs. Convergys lndia Pvt. Ltd. 2009 (16) STR 198 (Tri-Del.)

26. The Tribunal held that, credit of service tax paid on insurance premium, repair of vehicles, AMC charges for telecom and courier charges was admissible as they were in respect of manufacturing and exporting of coffee powder which was the business activity.
CCEC, Guntur vs. CCL Products (India) Ltd. 2009 (16) STR 305 (Tri-Bang.)

27. The credit of service tax paid on mobile phones used by the employees of the assessee in its premises for the purpose connected with manufacture/clearance of final products was allowed as the same was input service as defined in rule 2(1) of CCR, 2004.

CCE, Thane-II Nagpur vs. Axiom Impex International Ltd. 2009 (16) STR 309 (Tri-Mumbai)

28. The Tribunal held that, containers being used for packing of final products exported out of India was to be treated as inputs used by manufacturers in or in relation to manufacture of final products and therefore credit of service tax paid on freight for empty containers is admissible.

CCE, Jaipur-II vs. Nitin Spinners Ltd. 2009 (16) STR 323 (Tri-Del.)

29. The assessee claimed credit of service tax paid on GTA service used for transportation of liquefied gases from factory to buyers premises. The Tribunal observed that, gases to be maintained in liquid form at sub-zero temperature and hence cryogenic tanks used for storage and mounted on vehicles belonging to GTA. The appellant had paid the freight and amount thereof was included in assessable value of goods for payment of duty. Even agreement with customers also showed that ownership was vested with appellant up to the point of delivery. It was held that, conditions of CBEC Circular No. 97/08/2007-ST dated 23-8-2007 was fulfilled, hence credit allowed.

Inox Air Products Ltd. vs. CCEC, Nagpur 2009 (16) STR 411 (Tri-Mumbai)

30. The Revenue denied credit on ground that, documents were not in the name of assessee’s factory but issued in the name of head office situated elsewhere. The Tribunal observed that, there was no dispute with regard to input service received by the assessee and substantive benefit was not deniable on procedural grounds.

CC&CE, Vapi vs. DNH Spinners 2009 (16) STR 418 (Tri-Ahmd.)

31. The Commissioner (A) observed that no factory could function without a compound wall due to various problems such as security, environmental protection etc. and held that, CENVAT credit of service tax paid on construction of a compound wall around the newly constructed factory was admissible. It was further held that, where question of interpretation was involved, there was no question of imposing penalty.

In Re: Raymond Zambaiti Pvt. Ltd. 2009 (15) STR 596 (Commr. Appl.)

32. All and any activity relating to business is covered under input service, provided there is relation between manufacture of concentrate and such activity. Service tax is destination based consumption tax and is a value added tax with tax burden on ultimate consumer and not on manufacturer or service provider. CENVAT credit was availed on advertisement and not on contents of advertisement. Service tax paid on advertisement, sales promotion and market research admissible as credit for payment of excise duty on concentrate particularly, when such expenses form part of price of final product on which excise duty is paid. Principle that specific provision will override general provision is not applicable to provisions in the nature of concessions or exemptions.

Coca Cola India Pvt. Ltd. vs. CCE, Pune-III 2009 (15) STR 657 (Bom.)

D] PENALTY

33. The Tribunal held that appellant, an authorised auto dealer paid service tax with interest before issue of Show Cause Notice and pleaded that on account of confusion as to liability under business auxiliary service on incentive received, did not pay such service tax. However, on receiving clarification from CBEC vide Circular No. 8710512006-ST of 6-11-2006, they paid service tax and therefore, penalty u/s.78 was set aside by extending benefit u/s.80.

Jay Ganesh Auto Centre vs. CCE, Rajkot 2009 (15) STR 710 (Tri.-Ahd.)

34. Appellant ran a canteen in a factory in the rural area and provided meals to employees. They were ignorant of liability of service tax as outdoor caterer as they merely ran a canteen. On learning about it, they paid service tax with interest. Revenue levied penalty u/s.78 on the ground that ignorance of law could not be the excuse. According to the Tribunal, section 80 could come into play in the circumstances as the belief as to non-applicability of service tax was bona fide and accordingly, penalty u/s.78 was set aside.

Krunal Catering Service vs. CCE, Vadodara 2009 (15) STR 716 (Tri.-Ahd.)

35. The assessee availed exemption under Notification No. 1 /2006-ST and also availed CENVAT credit of service tax paid on input services and subsequently, they reversed CENVAT credit with interest being pointed out about non-availability of benefit of abatement of 67% under the said notification. The Tribunal observed that, the assessee had not utilized CENVAT credit and there were precedent decisions holding that exemption was admissible, when credit was reversed subsequently and held that order setting aside penalty was sustainable.

CST, Ahmedabad vs. Amola Holdings Pvt. Ltd. 2009 (16) STR 46 (Tri–Ahmd.)

36. The respondent, a tour operator, provided services of monumental tours, local transportation, rail/air ticket booking, etc. on behalf of principal agents. The turnover representing purchase of tickets and principal’s services was deducted from the value of taxable services, and accordingly remark was made in the ST-3 Returns. Suppression was alleged by the Revenue. Since disclosure was made in the ST-3 Returns, charge of misstatement or suppression was held incorrect and the Commissioner (Appea1s)’s ruling that mere failure to give some information did not amount to wilful mis declaration and that there must be a positive act from assessee to final wilful suppression was upheld.

CCE Kanpur vs. Taj Tours & Travels 2009 (16) STR 273 (Tri.-Del.)

E] OTHERS

Abatement

37. The Commissioner (A) observed that, credit on input service availed by Appellant while using Notification No. 1/2006-ST was due to ignorance and reversed along with interest before SCN. It was held that, there was no mala fide intention to evade tax and abatement is available to the appellant.

In Re: Prakash Construction 2009 (15) STR 579 (Commr. Appl.)

38. The Tribunal observed that, tyre retreading was composite contract involving sale of materials and rendering of service and specified as works contract under Karnataka VAT Act, 2003. VAT paid on portion of turnover attributable to transfer of property. It was held that, since material cost indicated separately in invoice, abatement under Notification No. 12/2003-ST was admissible.
Chakita Ranjini Udyam vs. CCEC&ST, Mysore 2009 (16) STR 172 (Tri. Bang.)

Appeal

39. The Revenue challenging the order of the Tribunal filed appeal in the Delhi High Court u/s. 35 of the Central Excise Act read with s. 83 of the Finance Act, 1994. In terms of the provisions of S. 35G read with S. 35L of the Central Excise Act against certain orders of the Tribunals, appeal is to be made to the High Court, whereas in respect of certain other orders passed by the Tribunal, a direct appeal to the Supreme Court has to be made. The High Court in this case, accepting the respondent’s contention, held that the appeal would not be maintainable as the question decided by the Tribunal relates to the rate of duty and when the issue relates to the rate of duty or tax or value of goods or assessment, relying on the decision in the case of Navin Chemical Mfg. & Trading Co. Ltd. v.Collector,1993 (68) ELT 3 (SC), the remedy for the appellant to file appeal u/s.35L was to be to the Supreme Court and therefore, the appeal was held not maintainable on this ground.

CST vs. Delhi Gymkhana Club Ltd., (16) STR 129 (Del)

40. The appellant received order on 13-9-2001 and dispatched appeal papers to Commissioner of Customs, Kandla by courier which were received by office of Commissioner (Appeals), Ahmedabad on 25-5-2004. The Tribunal observed that, appeal was addressed to proper office but wrongly dispatched to another officer by office of the counsel. It was held that, appellant should not suffer for mistake committed by Counsel and time spent before wrong forum was excludible in computation of limitation.

Maruti Udyog Ltd. vs. CC, Kandla 2009 (16) STR 178 (Tri-Ahmd.)

41. The department filed appeal in Form ST-7 along with statement of facts and grounds of appeal without signature of authorized person and contended that, defect was curable. The Tribunal held that, filing of appeal was right to be exercised in responsible manner and the defect in appeal was not curable and hence appeal was not maintainable

CCE, Belgaum vs. S. B. Engineers 2009 (16) STR 318 (Tri-Bang.)

Condonation of Delay

42. The question arose before High Court was whether the Court is empowered to condone the delay in filing appeal beyond prescribed period under statute. The High Court held that, under writ jurisdiction, the Court could not re-write the provisions of Act and the order of the single member bench of High Court remitting matter to Commissioner (A) with direction to decide appeal in accordance with law was set aside.

ACC, Chennai vs. C. Bharani Exports 2009 (16) STR 260 (Mad.)

Limitation

43. The appellant, a consignment agent of CIPLA, made a stay plea for non-applicability of longer period of limitation as the activity of the firm was known to the Department, as service tax demanded from the firm as clearing and forwarding agency was set aside by the Tribunal rejecting interpretation of the Revenue. Prima facie considering the appellant not guilty of suppression of facts with intent to evade payment of duty so as to attract longer period of limitation, pre-deposit of service tax and penalty was totally stayed.

Mahaveer Generics vs. CCE, Bangalore 2009 (16) STR 289 (Tri.-Chennai)

Null and void orders

44. The Supreme Court held as under:

• There was distinction between null and void orders and orders which are irregular, wrong or illegal. All irregular or erroneous or even illegal orders could not be held to be null and void. Where an authority making order lacks inherent jurisdiction, such order would be without jurisdiction, null, non-est and void ab initio as defect of jurisdiction of an authority goes to the root of matter and strikes at its very authority to pass any order and such a defect cannot be cured even by consent of the parties.

• Assessment order could not be held to be null and void on account of irregularities committed by assessing officer during course of assessment and at the best it was an illegality, which defect was capable of and has been cured by High Court by setting aside the order and by granting consequential relief.

Deepak Agro Foods vs. State of Rajasthan 2009 (16) STR 518 (SC)

Precedent

45. The High Court held as under:

When law laid down by Supreme Court on all relevant issues is holding the field and same was ignored by Tribunal as last court of appeal on facts and law then such order passed by Tribunal could not be said to be a judicious one. It was duty of Tribunal while hearing appeal both on facts and law to take note of all possible issues arising out of controversy and in particular legal issues and then decide them keeping in view the relevant provisions of law and decided cases on issue involved. If there is no decision of Supreme Court on issue then effort must be made to decide issue either on first principle applicable to case or by any decision of High Court if holding the field. If issues whether of law or fact arise then it must be dealt with at all levels by respective authorities by giving finding one way or other. If not raised at a proper stage but raised at later stage then also same could be dealt with either at that stage itself or it could be remitted back for decision depending upon discretion so exercised by appellate courts.

Choithram Hospital & Research Centre vs. UOI 2009 (15) STR 738 (MP)

Rectification of mistake

46. In this case, the Tribunal in its order made a mention about contention of the appellant with regard to non-applicability of extended period of limitation. However, no finding on the issue was provided and therefore, ROM application was filed. Despite the Revenue’s view that ROM would mean review by the Tribunal itself, it was held that recalling was necessary in the interest of principles of natural justice and matter was decided to be reheard.

Ridhi Sidhi Transport vs. CCE, 2009 (16) STR 271 (Tri.-Bang.)

Refund

47. The appellant sought refund of service tax paid on royalty paid to foreign collaborators during the period 1-1-2004 to 9-9-2004. However, they had continued their registration as consulting engineer and paid service tax even after 9-9-2004 on such royalty payment. The Tribunal held that, liability to pay royalty as consideration for Consulting Engineer service was understood by the appellant as per the terms of agreement and appellant was estopped from construing agreement to the contra for that part period.
Cummins Generator Tech. India Ltd. vs. CCE&C, Aurangabad 2009 (15) STR 556 (Tri. Mumbai)

48. The appellant claimed refund of service tax u/s. llB of the Central Excise Act, 1944 on contending that service tax was originally paid inadvertently considering that they were liable to pay service tax. Original authority allowed refund on finding that appellant had not rendered any service. The order was revised by the Commissioner directing to recredit the refund as the same was erroneously granted. On appeal by the appellant, CESTAT held that since the appellant issued credit notes towards refund of service tax to its clients, refund order passed by the original authority was legal and proper. On appeal by the department calling for interference in the order of CESTAT, the Hon’ble Court held that the order was perfectly legal and valid, and did not call for interference as no questions of law much less the substantial questions framed in the appeal arose for consideration.

Shiva Analyticals (I) Ltd. vs. Commissioner of Service Tax, Banglore, (2009) 21 STT 328 (Kar.)

Revision

49. The revision order was passed for enhancing penalty under section 78 of FA, 1994 and appeal filed by the assessee against penalty under section 78 was pending before Commissioner (A) on remand by Tribunal. The Tribunal held that, section 84(4) contains embargo on Commissioner as Revisionary authority dealing with same issue and hence, order relating to penalty under section 78 was passed without jurisdiction. However, the Tribunal retained penalty levied under sections 76 and 77.

Global Telecom vs. CST, Mumbai 2009 (15) STR 553 (Tri. Bang.)

50. The Tribunal held that, during pendency of appeal if stay had already been granted, then there was no requirement to pass any order extending such stay pending appeal, and the same would remain valid till final disposal of appeal. It was further held that, enforcement of demand during period of stay shall invite contempt proceedings against Revenue by Tribunal.

A. Mohammed Mubarrac vs. CCE, Trichy 2009 (16) STR 385 (Tri. Chennai)

51. Services of security agency at the depot and services of pest busters were used in the manufacturing activity of food products for human consumption. The former service used to prevent theft and the latter from contamination were found eligible for CENVAT credit by Commissioner (Appeals) after detailed analysis of ‘input service’ and following precedent of DCM Shriram consolidated Ltd., 2006 (4) STR 610 (Commr. Appl.) Finding no infirmity in the order, plea of department for stay of order was rejected.

CCE&C Guntur vs. Hindustan Coca-Cola Beverages P. Ltd., 2009 (15) STR 248 (Tri. Bang.)

F] WAIVER OF DEPOSIT

52. The appellant paid commission to foreign parties during 2004-05 and 2005-06 till October 30, 2005. This was covered as Business Auxiliary Service. However, service was exempt till 9-7-2004 under Notification No. 8/04-ST until it was restricted to services of commission agents relating to agricultural produce. The appellant had a bonafide belief as to non-taxability under reverse charge until the introduction of S. 66A on 18-4-2006. The Tribunal found force in the limitation plea as no clarity existed in law at material time as to the issue of applicability of reverse charge provision. It accepted bonafide belief in non-taxability and provided waiver of pre-deposit as part payment was made by the appellant prior to the issuance of Show Cause Notice.

Ashok Leyland Ltd. vs. CCE&ST, LTU Chennai, 2009 (15) STR 289 (Tri. Chennai)

53. The appellant, assembles items supplied by its principal, was demanded to pay service tax under ‘Business Auxiliary service’ and applicable interest and penalties were levied. The appellant, however, contended the activity as manufacturing yet paid service tax with interest before issuance of Show Cause Notice. The appellant’s appeal before the Commissioner (Appeals) was rejected for non-payment of pre-deposit who insisted on penalty amount for considering the appeal. While hearing the stay application, appeal itself was taken up by the Tribunal and the matter was remanded to the Commissioner (Appeals) directing that the appeal be heard without pre-deposit as usually when tax is paid with interest, pre-deposit should not be insisted upon.

N. K. Fasteners vs. Commissioner of Central Excise, Salem, 2009 (15) STR 330 (Tri. Chennai)

54. In the instant case, the appellant adjusted excess service tax paid against later liability. The Commissioner (Appeals) dismissed the appeal as payment of pre-deposit ordered was not complied with. The Tribunal remanded the matter for fresh decision with a direction that the matter be heard without insisting on pre-deposit in the circumstances when divergent views were held in various Tribunal decisions.

SRC Projects P. Ltd. v. CCE, 2009 (15) STR 463 (Tri. Chennai)

55. The petitioner was denied waiver of pre-deposit by the Tribunal in the issue of service tax demand as recipient of service for the period prior to 18-4-2006, in spite of relying on the High Court decision in the case of Indian National Shipowners Associations vs. UO1, 2009 (13) STR 235 (Bom). The High Court ruled that once this Court had laid down the law that the recipient of the service was not liable for paying service tax, that law was binding on all Tribunals and authorities functioning within the jurisdiction of this Court and accordingly, directed to proceed with the appeal without any pre-deposit.

A.C. Nielsen ORG–MARG Pvt. Ltd. vs. UOI 2009 (16) STR 259 (Bom.)

56. The appellant paid service tax with interest before issuance of show cause notice and pleaded for waiver of penalty levied u/s. 76. The Revenue insisted on pre-deposit on the strength of judgment of the Supreme Court in the case of Union of India vs. Dharmendra Textile Processor, 2008 (231) ELT 3 (SC). The Tribunal on weighing arguments by both the sides held that prima facie S. 76 was not comparable with penalty imposable u/s. llAC of the Central Excise Act which provided for penalty on defaults arising on account-of fraud, suppression or contravention of law with an intent to evade payment of duty and therefore held that on the strength of such case law, prima facie waiver of pre-deposit could not be resisted upon.

Deccan Mechanical & Chemical Industry Pvt. Ltd. vs. CCE, Pune 2009 (16) STR 263 (Tri. Mum.)

57. In the case of residential consumption service, the appellant paid service tax on 30% of the contract and VAT was paid on the balance 70% representing value of goods and material. Relying on the same Bench’s final order No. 24/2009 dated 16-1-2009 in the case of M/s. LSG Sky Chefs (India) Pvt. Ltd., 2008 TIOL 2476 CESTAT-Bang., it was observed that the Board also had issued circular to the effect that the appellant was not liable to pay service tax and the fact that where the sales tax is paid, service tax would not be demanded and the balance remaining unpaid pre-deposit was waived.

M/s. Sobha Developers Ltd. vs. CST, Banglore 2009 TIOL 1176 CESTAT-Bang.