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2008 (3) TMI 211 - AT - Service TaxConsultancy Agreements with foreign companies in connection with their setting up of projects or undertaking certain works in India demand raised under Management Consultant Service and Business Auxiliary Service applicant s claim that the agreements are for execution of work and not relating to rendering consultancy/advice is not prima facie acceptable - applicants have not made out a case for full waiver of Service Tax demanded
Issues:
Interpretation of consultancy agreements for services rendered by companies to foreign firms and demand of Service Tax under 'Management Consultancy Services' and 'Business Auxiliary Services'. Analysis: The case involved agreements between the applicants and foreign companies for services rendered in India to companies like ONGC and Reliance. The Commissioner demanded Service Tax for services rendered by M/s. Jubiliant Enpro (P) Ltd. and M/s. Empro Oil (P) Ltd. The applicants argued that the services provided were more in the nature of executing work rather than consultancy services. They contended that the demand under 'Management Consultancy Services' was not sustainable as the services fell under 'Business Support Services', introduced later. They also claimed that as the services were provided to foreign firms, they should be considered as exports and exempt from Service Tax. Despite the arguments, the Tribunal found the cases to be arguable, indicating contentious issues that needed detailed consideration during the final hearing. The applicants failed to establish a case for a full waiver of the Service Tax and did not prove financial hardship. The Tribunal ordered M/s. Jubiliant Enpro (P) Ltd. to pay Rs. 1.25 crores and M/s. Empro Oil (P) Ltd. to deposit Rs. 20 lacs within twelve weeks. Upon compliance with these payments, the Tribunal waived the pre-deposit requirement for the remaining Service Tax and penalties imposed on the applicants. The case was scheduled for compliance reporting on 16-6-2008. The decision was pronounced on 14-3-2008 by Member (T) M. Veeraiyan, with the case presided over by Justice S.N. Jha, President, and Shri M. Veeraiyan, Member (T) at the Appellate Tribunal CESTAT NEW DELHI.
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