Jyoti Balasundaram, Vice-President - (1.) WE have heard both sides on the application for waiver of pre-deposit of Service Tax of Rs. 35,32,115/- and penalty of amount equal to the tax demand in terms of Section 78 and penalty of Rs. 100/- per day in terms of Section 76 of the Finance Act, 1994. The issue relates to liability of service tax for target incentives etc., gifts in cash and kind, trips to abroad given to the Insurance Agent by the applicants herein. The period of dispute is 16.8.2002 to 31.12.2004.
(2.) We find prima facie force in the submission of the applicants that such gifts and target incentives are not includalble in the value of the Insurance Auxiliary Services received by them, in the light of the Tribunal's decision in the case of EURO RSCG Advertising Ltd. and Marketing Consultants and Agencies Ltd. v. Commissioner of Service Tax, Bangalore reported in 2007-TIOL-CESTAT-BANG holding inter alia that target incentives are not connected to service rendered to the clients nor is billed to the clients and, therefore, are not liable to service tax. We, therefore, waive the pre-deposit of the service tax and penalty and stay recovery thereof pending the appeal. (Dictated and pronounced in open Court);