2006 (8) TMI 22 - AT - Service Tax

Service Tax Classification of item in tax code Services rendered by appellants drawing processing and forwarding of samples to principles and testing or analysis of human beings or animals are not covered under business auxiliary services and not under technical testing and analysis services

Summary

Issues:
Determining whether the services provided by the collection centers fall under "Business Auxiliary Services" attracting service tax or under "Technical Testing and Analysis Services" excluded from the levy.

Analysis:
The dispute revolves around whether the services rendered by the collection centers qualify as Business Auxiliary Services or Technical Testing and Analysis Services. The definition of "Technical testing and analysis" includes scientific testing or analysis of goods but excludes testing in relation to human beings or animals. The appellants argue that testing starts with sample drawal and is an integral part of testing, thus excluded from service tax. They contend that drawing samples cannot be both part of testing and "promotion or marketing of service." The appellants further argue that services listed under one heading cannot be taxed under another heading, as it would contradict the legislative scheme. Additionally, they assert that drawing blood samples is ancillary to testing and analysis services, falling within the scope of Technical Testing and Analysis Services.

The Revenue argues that testing and drawing samples are separate activities, with testing commencing only after the sample reaches the laboratory. They claim that since testing or analysis in relation to humans or animals is excluded from the levy, any such activity should attract service tax under a different taxable service. The Revenue contends that the appellants' services, including sample collection and billing, constitute promotion or marketing services, falling under Business Auxiliary Services. They argue that services related to Technical Testing and Analysis must be directly connected to qualify for exclusion from service tax.

The Tribunal concludes that the services provided by the collection centers are integral to testing and analysis, falling under Technical Testing and Analysis Services. The definition of technical testing and analysis is broad, covering any service related to testing. The Tribunal emphasizes that drawing samples is connected to testing and analysis, whether incidentally or ancillary, making it part of the technical service. The Tribunal also highlights that specific entries in the tax code cannot be taxed under a general entry, as it goes against the legislative intent. Moreover, the services do not align with the definition of Business Auxiliary Services, as the appellants are not engaged in promoting or marketing testing and analysis services.

In light of the above analysis, the Tribunal rules in favor of the appellants, holding that the service tax demands are not sustainable. The impugned orders are set aside, and the appeals are allowed, providing consequential relief to the appellants.