ORDER
S.L. Peeran, Member (J)
1. The appellant was carrying on services of management consultant. The revenue has proceeded against the appellants for confirmation of two demands.
(a) Rs. 24,49,634/- towards services provided by PWCDA London directly to Govt. of Karnataka. The revenue contend that appellant is a holding company of PWCDA to be considered as an office of the foreign company in India.
2. Llearned Counsel submits that the receiver of the services is liable to pay tax from 16-8-02 in view of the amendment to Rule 2(1)(d)(iv) of the service tax rules; therefore, the liability does not arise against them. It is also submitted that the demands would be contrary to Board Circular dated 20th June 2003. He also submits that a holding company cannot be considered as a subsidiary of the Company of London. Therefore, the service tax on this point is not leviable.
(b) The second amount confirmed is Rs. 46,26,703/- under the category of management consultant services. It is submitted that appellant has already deposited Rs. 28,98,061/- and proof of deposit of TR-6 challan has been submitted. It is submitted that for the balance of the amount., they have produced evidence for non-inclusion of the same. However, the same has not been accepted, which is not justified. He submits that following categories are to be taken for consideration for levying service tax.
(1) reimbursement of out of pocket expenses involving no service tax demand non-acceptable services, secretarial, legal and tax services.
(2) invoices already reversing the amount has not been considered.
(3) Inter-office memoes could not be considered as services. He submits that total amount involving all this will be the balance of the amount after giving deductions.
Llearned Counsel relies on the following case laws.
(1) Sap India Systems Applications v. CCE Bangalore 2006 (1) S.T.R. 198 (Tri.-Bang)
(2) CC v. BHEL ,
(3) National Organic Chemical Industries Ltd. v. CC 2000 (126) E.L.T. 1072.
3. Learned DR opposes the prayer and submits that the appellant is required to be treated as an agent of the foreign company as they ‘were working under an agreement as a subsidiary unit. With regard to the deposits made, he refers to the TR-6 challan and fairly submits that appellants have deposited Rs 28,98,061/-. In so far as other categories are concerned, he reiterates the Commissioner’s finding.
4. On a careful consideration, we notice that with regard to the First amount, the appellants are contesting on the ground that they have no relation with PWCDA and they cannot be charged with service tax for services rendered by the London Company directly to the Government. Prima facie their submission has strong force and hence waiver of pre-deposit of this amount is granted. There shall be no recovery of this amount.
5. So far as the second amount is concerned, appellants have already pre-deposited Rs. 28,98,061/-. For the balance amount they have raised certain objections and learned Counsel points out to the evidence produced with regard to the inter-office memos which has not been considered by the authorities. He also submits that the other categories pointed out are not taxable. Since the appellants have already pre-deposited more then 50% of the amount, their plea has to be accepted for granting waiver of this amount. Stay application is allowed unconditionally granting waiver and staying its recovery till the disposal of the appeal.
(Pronounced and dictated in open court)