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2014 (6) TMI 592

Head Note / Extract:
Demand of service tax - Business Auxiliary service - Whether the services rendered were classifiable under BAS prior to 16-6-2005 or not - Held that:- Activities undertaken by the appellant for which they were collecting service charges were in respect of cargo imported or exported by their customers and this fact is evident from the nature of service charges collected - services were in relation to procurement of goods or services, which are inputs for the client and such services clearly fell under sub-clause (iv) of section 65 (19) as it stood with effect from 10-9-2004. Even if it is held that these activities did not fall under sub-clause (iv), they would certainly fall under sub-clause (vii) as any service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi). Even if the appellant had acted as a commission agent as claimed by them, they would fall under sub-clause (vii) of clause (19) of section 65 as the entry covered the services rendered as a commission agent.

From the statutory definition of BAS as it stood prior to 10-9-2004, the services rendered by the appellant would not come under any of the activities specified under various sub-clauses, namely, (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; (ii) promotion or marketing of service provided by the client; (iii) any customer care service provided on behalf of the client; or (iv) any incidental or auxiliary support service in respect of (i) to (iii). Therefore, there would not be any liability to pay service tax prior to 10-9-2004 on the appellant.

Extended period of limitation - Held that:- bonafide belief is not blind belief and belief can be said to be bona fide only when it is formed after all reasonable considerations are taken into account. No evidence has been led before us showing that the appellant took all reasonable pre-cautions. - extended period of limitation applicable.

The services rendered by the appellant are liable to service tax under "Business Auxiliary Service" as defined in 65 (19) of the Finance Act, 1994 for the period from 10-9-2004 onwards - The consideration received shall be treated as cum-tax and the service tax liability shall be re-computed for the period from 10-9-2004 onwards - The appellant shall be liable to penalties under sections 76, 77 and 78 of the said Finance Act, on the re-determined service tax liability - For the period from 10-5-2008, penalty under section 78 alone shall apply and not that under section 76 - Decided partly in favour of assessee.


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