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2013 (5) TMI 618 - HC - Service TaxFree call services provided to employees - Pre-deposit demand of a sum of ₹ 80 crores out of a tax demand of ₹ 118,70,19,472/- as also a penalty in the amount of ₹ 125 crores - chargeability of service tax on the free calls which are provided by the appellant to its employees - As per assessee any service provided free of charge cannot be the subject matter of service tax as per Circular dated 13.10.1997 issued by the Central Board of Excise and Customs by way of a clarification - Held that:- The appellant would be entitled to partial relief at this stage as the period in question for which the demand has been raised is 2004-09. Even agreeing with the respondents that the CBEC Circular dated 13.10.1997 was superseded by the later Circular dated 23.08.2007, it would imply, prima facie, that the earlier Circular dated 13.10.1997 held the field till 23.08.2007. It is in this context learned counsel was asked to bifurcate the tax demand of approximately ₹ 118 crores between the two periods, i.e., from 2004 upto 23.08.2007 and from the latter date till the end of the relevant period in 2009. Therefore, considering the entire period 2004-09 and the tax demand of approximately ₹ 118 crores, the period prior to 23.08.2007 would entail, if at all, a tax demand of approximately ₹ 70 crores. Thus the requirement of predeposit of ₹ 80 crores does not appear to be reasonable and be reduced to ₹ 25 crores. The said amount be deposited by 31.05.2013. In case the said deposit is made, the rest of the demands including the penalty would be stayed till the pendency of the appeal before the Tribunal.
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