2023 (3) TMI 500 - AT - Service Tax

Classification of services - Business Auxiliary Service (BAS) or Business Support Services (BSS) - rendering services to foreign companies for evaluation of prospective garment manufacturers, processing purchase orders, customer management, tracking of delivery schedules, operational assistance for marketing, customer service, pricing policies, managing, distribution, logistics etc. - export of services or not - HELD THAT:- It is found from a plain reading of clause (104c) of Section 65 that “support services of business or commerce” specifically relates to evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, etc., which were the activities undertaken by the appellant, while the definition of business auxiliary service under clause (19) of Section 65 of the Act is more general in nature. Hence, the services have been correctly classified under the specific heading of ‘support services of business or commerce’ and does not require us to traverse through section 65A(2) of the Finance Act, 1994.

This Hon’ble Tribunal’s judgment in the case of the appellant in M/s. Fifth Avenue v. Commissioner of Service Tax Chennai [2009 (3) TMI 133 - CESTAT, CHENNAI] and referred to by Revenue, has at paragraph 4.1, clearly found without ambiguity that the services rendered to the vendors and the companies by the appellants therein conformed to the statutory definition of SSBC and hence, the services rendered to the vendors and companies were classifiable under SSBC and not under BAS. Hence section 65A of the Finance Act, 1994 was not required to be discussed in the order.

As regards Revenue’s claim that the LC margin retained by FASPL was nothing but consideration received for the marketing services rendered for vendors and identification and procurement services rendered to the buyers and hence, could not be classified as “export of service” - it is found that the matter has also been examined in detail by the Hon’ble Tribunal in M/S. FIFTH AVENUE SOURCING PVT. LIMITED VERSUS CST, CHENNAI [2017 (9) TMI 895 - CESTAT CHENNAI]. The issue hence does not survive for fresh consideration.

Appeal allowed.