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2017 (6) TMI 686 - AT - Service TaxBusiness Auxiliary Services - classification of services - whether the Terminal Handling Charges (THC) received by the assessees is taxable under the category of Business Auxiliary Service? Held that: - The definition, as it stood prior to 10.9.2004, expressly mentions the words billing, collection or recovery of cheques, accounts and remittances which are the services falling under Sl. No.12 to 14 out of the fourteen services rendered by the assessee. It is not necessary that such services should be incidental or auxiliary to the services mentioned in (i), (ii) and (iii). As rightly argued by the department, the services of billing, collection of freight etc. are stand alone services by themselves and would qualify to be Business Auxiliary Service. The assessee, is preparing the Railway receipt, (billing), collecting the Railway Freight and remitting the same in RBI for Railways. For utilizing the services of Railways within the Port area the customers have to pay charges to Railways. The assessee cannot collect freight from the customers unless authorized by the Railways. For this reason, the issuance of railway receipts and collection of freight is definitely rendered on behalf of Railways and the remittances of the amount in Reserve Bank of India is also rendered on behalf of Railways which would make the services rendered on behalf of client. The Consultant has made a frail effort to establish that being transportation of goods by rail the services if any would fall under Sec 65(105)(zzzp) and such transportation being through government railways, it is not exigible to tax. The activities carried out by the assesse, are not mere transportation of goods by rail, but the billing, collection of freight, remittance etc. Therefore this ground fails. When the assessee is receiving Terminal Handling Charges for the services rendered to Railways and when Sl. Nos. 12, 13 and 14 would qualify for Business Auxiliary Service as taxable services, it is for the assessee to give the charges collected for each of the 14 services and to prove that such THCs do not apply to the services other than Sl. No. 12, 13 and 14. Extended period of limitation - Held that: - appellants had suppressed the fact of subject income in the subsequent periods. In this scenario, appellant cannot then take the plea that the extended period cannot be invoked on the ground that the information was declared in the returns. Being a public sector also cannot be a plea against invocation of extended period - appellants did not seek or obtain additional registration under Business Auxiliary Service even after the issue of the first impugned order of the Commissioner dated 11.5.2006 - invocation of extended period justified. Penalties - Held that: - the appellant had paid up the tax liability along with interest even before issue of the SCN which cooperation has been taken into consideration by the adjudicating authority for non-imposition of penalties as a mitigating factor for non-imposition of penalties - penalties not justified. Appeal allowed - decided partly in favor of assessee.
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