TMI Blog2014 (7) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... put to terms. The Tribunal's direction to deposit a sum of ₹ 147 crores out of total demand of ₹ 187 crores and when the point was imminently arguable, visits the Appellants with serious consequences. - Decision in the case of Sri Srinivasa Theatre and others v/s Government of Tamil Nadu and others [1992 (3) TMI 308 - SUPREME COURT OF INDIA] followed. 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 opinions and rendered by its different Benches, then, the Assessee should not be visited with such consequences as would amount to denying the right of appeal or completely prejudicing the case on merits. Though the provision of law in this case makes no reference to ownership, but there was an order passed making it a relevant test, then, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xing 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 itself, then, this was a fit case for complete waiver of predeposit and stay of recovery. 3. In the alternative, Mr.Dada submits that it was clear that the material with regard to the financial hardship was placed before the CESTAT, however, it failed to take note of the same. This is not a case where the CESTAT could have gone by the column pertaining to the assets/current assets ignoring liabilities. That there is huge debt and that the Appellants are suffering losses was prima facie clear from the books of account. In such circumstances the CESTAT was in complete error even at this prima facie stage in passing the order under challenge. The matter raises a substantial question of law and this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eservation 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 CRS Companies is not classifiable under the taxing entry of Online Information and Database Access or Retrieval Service . It has been pointed out by the Appellants in answer to the allegations in show cause notices that the Appellants have entered into an arrangement with the CRS Companies. That is subject matter of the dispute. There is Global Distribution System (for short GDS) which is a facility developed by various companies such as M/s Galileo International Partnership USA, M/s Abacus Distribution Systems Pte. Ltd., M/s Amadeus Marketing S.A. Spain, M/s Sabre Travel Information Network USA and others. These companies are CRS companies. The GDS system provides the Travel Agents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 Appellant with the CRS companies. That is to display the Appellant's own information on the CRS servers. Mr.Dada handed over to us a Chart and which according to him would show as to how the information has passed and through channels indicated therein. 9. It is urged that in the backdrop of all this the service tax liability must be seen. The allegation in show cause notices is that it is the Appellant who failed to discharge his service tax liability as a recipient of services under the Reverse Charge Mechanism. What this overlooks is the manner in which the said information passes through the channels. 10. The argument is that the classification under the taxing entry o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership 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 access is not possible. Therefore, providing access to data or information through a medium or network is a service and the services rendered by the Appellant/ United Telecom were clearly falling within the ambit of Online Information and Database Access or Retrieval Service . 12. That is how the Tribunal concluded in paragraph 7.3 as under: 7.3 We do not agree with the Commissioner that the ownership of data is not relevant. It is a very relevant factor. Whenever, there is information and data retrieval, the ownership definitely becomes very relevant. Just because, the appellant provided a part of the network equipment, we cannot say that the appellant was responsible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 the Tribunal applied the ratio in the case of United Telecom (supra) and granted partial stay and which direction is to be found in paragraph 11 of the order passed in that regard. 15. The Tribunal has also passed an order in the case of State Bank of India v/s Commissioner of Service Tax, Mumbai-II reported in 2013 TIOL 767 CESTAT-Mum. This order is also relied on to show that the State Bank of India entered into similar contract and arrangement. Reliance is placed on the order of the Tribunal's South Zonal Bench in the case of M/s Philips Electronics India Ltd. v/s Commissioner of Service Tax, Chennai reported in 2013-TIOL-1655-CESTAT-MAD, in which an unco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal'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 of Empire Industries Ltd. and others v/s Union of India and others reported in AIR 1986 SC 662. In paragraphs 58 and 59 this is what the Honourable Supreme Court held: 58. Good deal of arguments were canvassed before us for variation or vacation of the interim orders passed in these cases. Different Courts sometimes pass different interim orders as the Courts think fit. It is a matter of common knowledge that the interim orders passed by particular Courts on certain considerations are not precedents for other cases which may be on similar facts. An argument is being built up nowadays that once an interim order has been passed by this Court on certain f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 passed in the case of M/s Thai Airways International Public Company Limited v/s Commissioner (Adjn.) Central Excise, Delhi reported in 2013 TIOL 1117 CESTAT-DEL cannot be said to be conclusive because the Tribunal relied only on the opinion of the learned Judicial Member. There is difference of opinion between members on the Bench deciding Thai Airways (supra) and the matter is still at large. 21. We have perused the order passed and impugned in the present Appeal and particularly paragraphs 5.7 to 5.9. We are of the opinion that it was not necessary for the Tribunal to have rendered any conclusive finding on the point. If it was still at large th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 economy, of trade, profession and industry, the justness of the burden, its 'acceptability' and other similar considerations. We do not mean to say that taxation laws are immune from attack based upon Article 14. It is only that Parliament and legislatures are accorded a greater freedom and latitude in choosing the persons upon whom and the situations and stages at which it can levy tax. We are not unaware that this greater latitude has been recognised in USA and UK even without resorting to the concepts of 'equality before law' or the equal protection of laws as something that is inherent in the very power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 opinions and rendered by its different Benches, then, the Assessee should not be visited with such consequences as would amount to denying the right of appeal or completely prejudicing the case on merits. They ought to be given a meaningful opportunity to argue their case on merits before the Tribunal. Equally it is for the Revenue to support its demand on the basis of records and provisions of law. Though the provision of law in this case makes no reference to ownership, but there was an order passed making it a relevant test, then, such condition as is imposed in the present case cannot be said to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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