1. After examining the records and hearing both sides, we note that the Commissioner has demanded service tax of Rs. 81.50 lacs and education cess of Rs. 1,18,327/- from the appellants for the period July 2003 to June 2006 in respect of the service rendered by them to M/s. Saudi Arabian Airlines in the category of 'business auxiliary service'. The tax demand is a levy on 'overriding commission' received in Indian currency from M/s. Saudi Arabian Airlines as consideration for the service in question. It is submitted by learned Counsel that an earlier decision of this Bench on similar issue for the period July 2001 to March 2005 in the case of ETA Travel Agency (P) Ltd. v. Commissioner 2007 (7) S.T.R. 454 (Tri. - Chennai) is presently under appeal and that the Hon'ble High Court has, by an interim order, stayed its operation.
In that case, this Bench had upheld the demand of service tax on overriding commission collected by the assessee from Malaysian Airlines as consideration for a similar service. Learned SDR has pointed out that, in the case of Translanka Air Travel Pvt. Ltd. v. Commissioner 2007 (7) S.T.R. 476 (Tri. - Chennai) also, a similar view was taken by this Bench and that the said decision still stands in favour of the Revenue. On the other hand, it is submitted by learned Counsel that, in a subsequent case of a reinsurance broker viz. Suprasesh General Insurance Services & Brokers (P) Ltd. v. Commissioner 2007 (8) S.T.R.513 (Tri.) : 2007 (10) STT 22 (Chennai - CESTAT), this Bench granted waiver of predeposit and stay of recovery in respect of the amount of service tax sought to be levied on reinsurance brokerage collected in Indian currency by the said assessee from a foreign company. It is urged by the counsel that the principle [that there shall be no service tax on export of services] employed in the case of the reinsurance broker be adopted in the present case as well. It is submitted that in the present case also, the service recipient (M/s. Saudi Arabian Airlines) is resident abroad and has no office in India; that they have received business auxiliary service "exported" by the assessee and that, as consideration therefor, paid overriding commission in Indian currency to the assessee.
2. After considering the submissions, we note that, the decision in ETA Travel Agency case having been stayed by the High Court, it will not be correct, at this juncture, to rely on that decision or the subsequent decision of this Bench in Translanka Air Travel case, wherein the earlier decision was followed. The stay order passed by this Bench in the case of Suprasesh General Insurance Services & Brokers (supra) appears to be beneficial to the appellants in the present case for the period prior to 1-5-2006, the date on which the charging section under the Finance Act, 1994 was amended. Learned Counsel has not insisted that the benefit of the above stay order is available to her clients for the period from 1-5-2006 also. The period of dispute in this case ends on the 30th June 2006. It would mean that the appellants are yet to make out a prima facie case against the demand of service tax for the months of May and June 2006. We have not come across any plea of financial hardships in the present application either. In the result, there will be a direction to the appellants to pre-deposit an amount of Rs. 5,00,000/- (Rupees Five lakhs only) within four weeks and report compliance on 17th December 2007.