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2019 (1) TMI 1107 - AT - Service TaxBusiness Auxiliary Services - Commercial concern or not - services to clients in respect of supply of IMFL to CSD canteens - N/N. 14/2004. - basic contentions of the appellant were on the issue that they being a proprietorship concern cannot be equated to a commercial concern for the purpose of Business Auxiliary Service - time limitation - Held that:- It is seen from the records of the case that the appellants have entered into contract with two companies and have engaged 34 people for helping them in the discharge of their functions vis-à-vis their customers; they have received commission to the tune of crores of rupees. The concern being reasonably big, the appellants claim that they are proprietorship concern and not a commercial concern, does not find favour with us - the activity undertaken by the appellants are certainly not on a small scale to be held to be a proprietorship concern in the understanding of a common man - the Ld. Commissioner has rightly observed that the service rendered by the assessee is as a commercial concern. Appellant also claims themselves to be a commission agent of their customers - Held that:- Sub-clause (vii) under Business Auxiliary Service includes a service incidental or auxiliary to any activity specified in clauses (i) to (vi) and includes activities 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, management or supervision and includes services as a commission agent, but does not include any information technology service and any activity that amounts to “manufacture” within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944 - the services rendered by the appellants are within the ambit of Business Auxiliary Service. Time Limitation - Held that:- The appellants were under bona fide belief that the services by them are not taxable to service tax - extended period cannot be invoked - demand needs to be limited to the normal period. For the computation of duty payable during the normal period, the issue needs to go back to the original authority. Simultaneous Penalty u/s 76, 77 and 78 of FA - Held that:- Ld. Commissioner has imposed penalty under Section 76 and Section 78 simultaneously, which is not permissible during the relevant period. Moreover, we find that Ld. Commissioner has imposed penalty under Section 78 equivalent to twice the duty demanded - this is very harsh - penalty u/s 78 set aside - However, penalty under Section 77 and Section 76 would continue. The appeal is remanded with a direction to the Original Authority for computation of demand to the normal period and penalty under Section 77 and Section 76 would continue - appeal allowed by way of remand.
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