TMI Blog2013 (12) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... for the debit/credit card. Vouchers are definitely not substitute for carrying cash as is the case with credit/debit card. In fact, in real life value of such meal vouchers is limited to two thousand per month per employee - Assessee have not been able to provide any evidence to come to the conclusion that the assessee were having a bonafide belief that they were not required to pay service tax during the period under Business Auxiliary Services. No attempt was made by the assessee to ascertain their tax liability from the department before the investigation started - Decided against the assessee. Classification of service - BSS or BAS - section 65A - Held that:- The introduction of new service did not bear any specific pattern or coverage to particularly sector. In Central Excise Tariff as also Customs Tariff, the classification is based upon scientific principle and pattern. Keeping in view the evaluation of various entries in the service tax, it is not unusual to find that a particular activity service may get covered by more than one entry/classification. - since the activities are more specifically covered under Business Auxiliary services as per Sec.65A(2), the same woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng taxes. Similar to the meal vouchers, the assessee also issues gift vouchers which can be used for purchase of other variety of goods. Gift vouchers can be used for purchase in book shops, music shops and other departmental shops for buying such items from their affiliates. The main business is relating to meal vouchers. 2. The assessee were issued a show-cause notice dated 28.4.2006 demanding service tax on the service charges collected from the affiliates under the Business Auxiliary Services for the period 1.7.2003 to 31.12.2005. In the show-cause notice, the assessee were also asked to pay service tax on the service charges collected from their customers under Business Auxiliary Services for the period 10.9.2004 to 31.12.2005. The definition of Business Auxiliary Service underwent a change w.e.f. 10.9.2004. The case was adjudicated by the Commissioner who confirmed the demand relating to the service charges collected from affiliates. However, the Commissioner dropped the demand relating to service charges collected from the customers. The assessee as well as Revenue are in appeals against the said order of the Commissioner. The assessee are in appeal against the confirmatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Another contention raised by the Ld. Advocate to assessee is that there is no suppression of facts to justify invocation of extended period of limitation. In support of this contention, they argued that while taking centralized service tax registration, they have indicated in the documents that they are in the business of vouchers and therefore, all their activities were within the knowledge of the department and therefore extended period cannot be invoked. Since extended period cannot be invoked, there is no question of imposition of penalty. They have also filed written submissions against the appeal filed by the Revenue. Their main argument against the appeal filed by the revenue is that Revenue's contention that the business auxiliary service should be read in its entirety is not sustainable as the show-cause notice very specifically alleged clause (vi) of Business Auxiliary Service which covers provisions of services on behalf of clients. They further contended that none of the provisions covers the service provided by them to their customers/clients. 6. Ld. A.R. on the other hand has submitted that the assessee are promoting the business of their affiliates in as much a us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he penalty should have been imposed equal to the duty confirmed. Penalty amount should have included the education cess. 7. We have considered the rival submissions and given considerable thoughts to the various issues. The business auxiliary service has been defined under the Finance Act,1994 as under:- business auxiliary service" means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production or processing of goods for, or on behalf of, the client; (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, manageme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such vouchers. In credit/debit card, card holder pays only for the goods services purchased. Moreover, when a user presents such meal vouchers to an affiliate and if value of goods and services availed in less than the value of vouchers, he does not get refund and excess amount is retained by affiliates. No such thing happens in credit/debit card. In India, the above voucher system is used mainly to save tax. In view of this position, in our view, meal voucher cannot be compared with credit/debit cards and cannot be called a payment system which is true for the debit/credit card. Vouchers are definitely not substitute for carrying cash as is the case with credit/debit card. In fact, in real life value of such meal vouchers is limited to two thousand per month per employee. 10. The other contention of the assessee is that they are paying service tax under Business Support service with effect from 1.5.2006 it cannot be covered under any other entry. The Business Support service is defined under Sec. 65 (104c) of the Finance Act which is as under- "support services of business or commerce" means services provided in relation to business or commerce and includes evaluation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f taxable services. (1) For the purposes of this Chapter, classification of taxable services shall be determined according to the terms of the sub-clauses (105) of section 65; (2) When for any reason, a taxable service is prima facie, classifiable under two or more sub-clauses of clause (105) of section 65, classification shall be effected as follows :- (a) the sub-clause which provides the most specific description shall be preferred to sub-clauses providing a more general description; (b) composite services consisting of a combination of different services which cannot be classified in the manner specified in clause (a), shall be classified as if they consisted of a service which gives them their essential character, in so far as this criterion is applicable; (c) when a service cannot be classified in the manner specified in clause (a) or clause (b), it shall be classified under the sub-clause which occurs first among the sub-clauses which equally merits consideration. 13. It is obvious from the section that the Act itself recognizes that service may be classifiable under two or more sub-causes of clause (105) of Section 65. In view of the above provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Management Consultancy Services. The executor services were held to be not covered under Management Consultancy Services. In the case of IBM India Pvt. Ltd.vs. Commissioner of Service Tax, Bangalore reported in 2010 (17) S.T.R. 317 (Tri-Bang) the issue was relating to Management consultant service, software implementation which was executor in nature and it in this context certain observation was made by the Tribunal. The facts in the present case are very very different. As discussed earlier, we are of the view that the activity of the assessee helps in promoting the sale of goods and services of its affiliates and clearly covered by the specific entry under Business Auxiliary Services. Moreover, prima facie, we do not find that the said activity gets covered under Business Support Services. In any cases, since the activities are more specifically covered under Business Auxiliary services as per Sec.65A(2), the same would be covered under Business Auxiliary Services. The various observation made in various case laws cited are not applicable in the facts and circumstances of the present case. 14. Another contention of the assessee is that by preparing a list of affiliates and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed. In support of the said contention, he has cited certain case laws. In the case of Commissioner of Service Tax, Mumbai vs. S.R. Enterprises reported in 2008 (9) S.T.R. 123 (BOM), the Hon'ble Bombay High Court has stated that the CESTAT is empowered to reduce penalty as per statutory provisions keeping in view the facts and circumstances of the case. Another case law cited is that of this Tribunal in the case of Flyingman Air Courier Pvt. Ltd. vs.CCE, Jaipur reported in 2006 (3) S.T.R. 283 (Tri-Del), wherein this tribunal, after taking into account that the appellant had bonafide belief that their service was not being covered under definition of courier' service, held that penalty was not sustainable. Similarly in the case of Hutchison Telecom vs.CCE, Mumbai reported in 2006 (1) S.T.R. 80 (Tri-Del.) this tribunal has waived the penalty under Sec.80 of the Finance Act, 1994 keeping in view the fact that SIM card where the issue was not free from doubt whether to pay service tax or to pay sales tax, the Hon'ble Bombay High Court in the case of Commissioner of Service Tax vs. Hutchison Mson Max Telecom Pvt. Ltd. reported in 2008 (9) S.T.R. 455 (Bom) has waived the penalty. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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