SOLAIMALAI COMMUNIQUE Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE lower authorities have demanded service tax of Rs. 1,73,037/ - from the appellants on 'Business Auxiliary Service' rendered by them to cable operators during July 2003 to March 2004 and have also imposed on them penalties under various provisions of the Finance Act 1994. The present application is for waiver of pre -deposit and stay of recovery in respect of these amounts. After examining the records and hearing both sides, I find that, under an Agreement dated 1 -10 -2002 with M/s. ESPN Software India Pvt. Ltd., the appellants were rendering what was called "ESS Services" on behalf of the above company to cable operators during the above period. The lower authorities classified the said services as Business Auxiliary Services as defined under Section 65(19) of the Finance Act, 1994 and, accordingly, demanded tax on the value of consideration collected by the assessee from their customers. It appears from the records that the classification of "ESS Services" as "Business Auxiliary Services" is consistent with the provisions of the above Agreement. Before the original authority, the assessee did not claim any exemption from payment of tax. But, before the first appellate authority, they claimed such exemption under Notification No. 24/2004 -S.T., dated 10 -9 -2004 which had exempted the value of business auxiliary services from payment of tax for the period prior to 10 -9 -2004. The claim of the party was under Clause (c) of the Notification. This claim was rejected by learned Commissioner (Appeals). In the present appeal, their claim is under Clause (d) of the Notification. This is a claim not raised before the lower authorities. The claim under Clause (c) of the Notification has, apparently, been abandoned by the assessee. In other words, there seems to be no sustainable challenge against the impugned order.

(2.) FOR the aforesaid reasons and in view of the fact that the party has not pleaded financial hardships, I direct the appellants to pre -deposit the entire amount of Service tax demanded in the impugned order. This deposit shall be made within 4 weeks. Report compliance on 2 -2 -2007. In the event of due compliance, there will be waiver and stay in respect of the penalty amount.