Customs, Excise and Gold Tribunal - Tamil Nadu
Malabar Management Services (P) Ltd. vs Commissioner Of Service Tax on 20 April, 2007
Equivalent citations: [2007]10STJ149(CESTAT-CHENNAI), 2007[8]S.T.R.48, [2007]10STT310
ORDER P.G. Chacko, Member (J)
1. This application of the appellants, moved by their new counsel, is for modification of Stay Order No. 176/2007 dated 16.02.2007, wherein we had directed the appellants to predeposit Rs. 50 lakhs out of Rs. 1.48 crores for the purpose of Section 35F of the Central Excise Act read with Section 83 of the Finance Act, 1994. It is submitted by learned Counsel that the trade notices cited in para 4 of the affidavit filed in support of the stay application were not considered by the bench while passing the above stay order. We have perused the trade notices cited by counsel, which are available on record. These trade notices issued in 1997 and 1998 by the Delhi and Indore Commissionerates were dealing with the question whether out-of-pocket expenses incurred by the 'service provider' on behalf of the 'service recipient' and reimbursed by the latter could be exempted from inclusion in the gross amount for the purpose of levy of Service Tax. These trade notices were dealing with certain specified services, which, of course, did not include "Business Auxiliary Services", which were not in the list of taxable services under the Finance Act at that time. Learned Counsel has, however, relied on the principle discussed in the trade notices and has urged that the same be applied to the actual expenses incurred by the appellants and reimbursed to them by M/s. ICICI Bank (service recipient). We have heard learned SDR also. The submissions made by learned Counsel in support of the present application is argumentative and does not bring out a prima facie case for his clients inasmuch as the trade notices of 1997 and 1998 did not, and could not, deal with the question whether, in relation to rendering of "Business and Auxiliary Services", out-of-pocket expenses reimbursed by the service recipient could be included in the gross amount under Section 67 of the Finance Act for the purpose of levy of Service Tax. "Business Auxiliary Services" became taxable for the first time on 01.07.2003. No circular of the Board or trade notice of any Commissionerate on the above question in relation to "Business Auxiliary Services" has been cited by the counsel. However, it is submitted by counsel that, where it is found that the appellants have an arguable case, they should be held to have made out a prima facie case for the purpose of waiver of predeposit and stay of recovery. In this connection, reliance is placed on Ruby Rubber Industries v. Commissioner of Central Excise, Calcutta-II , wherein, in a writ petition filed by the party, his Lordship granted waiver and stay after having found arguable case for them. We are an Appellate Tribunal having no power to grant equitable reliefs like the one which was given by the Hon'ble High Court to the party in a writ petition.
2. We have not found valid case for full waiver of predeposit and stay of recovery as prayed for. However, taking into account the plea of financial hardships now supported by audited profit and loss account for 2005-06, we are inclined to reduce the amount for predeposit. Accordingly the appellants shall predeposit an amount of Rs. 15 lakhs (instead of Rs. 50). Time is extended for making this deposit by 4 weeks from today. Report compliance on 01.06.2007. Stay order No. 176/2007 will stand modified accordingly.
(Dictated and pronounced in open court)