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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, MADRAS
MS. JYOTI BALASUNDARAM, Dr. Chittaranjan Satapathy, VICE-PRESIDENT
Arafaath Travels (P.) Ltd. -Appellant
Versus
Commissioner of Service Tax, Chennai -Respondent
STAY ORDER NOS. 454-455/2010, APPLICATION NOS. ST/S/206 & 211/2010 APPEAL NOS. ST/354 & 359/2010
Decided On : 20-09-2010
V.S. Manoj,C. Dhanasekaran
Jyoti Balasundaram, Vice-President ‑ Heard both sides on the applications for waiver of pre-deposit of service tax of Rs. 1,31,45,172 together with interest and penalty. Demand of approximately Rs. 6 lakhs arises on overriding commission paid to the assessees who are general sales agents for foreign airlines. The remaining is on agency incentives.
2. As regards the demand of overriding commission, we find that in the case of the same assessees vide Stay Order No. 716/2008 dated 7-8-2008 [2009 (14) S.T.R. 83 (Trib.-Chennai)] and Stay Order No. 1095/2007, dated 9-11-2007 [2008 (9) S.T.R. 262 (Trib.-Chennai)] about one-third of the demand has been directed by way of pre-deposit. As regards agency incentives, the Commissioner has given a finding rejecting the plea of the assessees that incentives received would not form part of the taxable value for the reason that the money was received towards incentives and only entries were made in the books of accounts without providing any service. He has dealt with the submission of the assessees by holding that the question of making entries in the books of accounts would not arise unless such incentives had been received by the assessees.
3. Keeping in view the earlier stay orders as well as the fact that the contention that no tax is leviable on agency incentives, is debatable, we direct pre-deposit of Rs. 35 lakhs (Rupees Thirty five lakhs only) within a period of 8 weeks from today and on such deposit, the pre-deposit of balance tax and penalties shall stand waived and recovery thereof stayed pending the appeals. Failure to comply with this direction shall result in vacation of stay and dismissal of the appeals without prior notice.
