2010 (12) TMI 40 - CESTAT, NEW DELHI

Promotion of logo – business auxiliary service (BAS) - the Agreement dated 30.3.1995 was entered into between Sahara Corporation and the appellants in order to promote business of Sahara Corporation by the appellants and accordingly, the business activity of Sahara Corporation in relation to housing and real estate projects was sought to be promoted and publicized by printing logo of Sahara Corporation on the air tickets, boarding passes, baggage tags and publicity materials and advertisement in newspaper holding, etc – Held that: - If the construction or development activity amounts to render "service" which would qualify the same to be one in respect of which some other person or entity can conduct the activity of the nature of Business Auxiliary Service for the purpose of attracting the provision of Section 65(19)(ii) of the said Act, was intended to be the charge against the appellants to bring them in the net of service tax under the said provision of law, obviously, it was necessary for the department to lay necessary factual foundation in that regard in the show cause notice. – Order traveled beyond the scope of SCN

Unless the service recipient is shown to have been engaged in rendering some service to others and the service provider is shown to have rendered his service for promotion or marketing of such service provided by the service recipient to others, the question of creating liability under the said Act in terms of Section 65(19) (ii) read with 65(105) ( zzb ) of the said Act does not arise. - the allegation or charge in that regard relates to the sale of immovable properties or the developed properties or the constructed project by Sahara Corporation. It does not relate to any service rendered by Sahara Corporation to others in relation to the sale of such properties or projects.

Merely because the debit notes speak of charges being paid for the services according to the agreement between the parties that by itself would not be sufficient to conclude that the activity in the form of display of logo would be the business auxiliary services within the meaning of the said expression, unless it is established that the activity of Sahara Corporation is service to others and the activity of display of logo has resulted in promotion and advertisement of such service of Sahara Corporation

The brand promotion was not included in the category of business auxiliary services prior to the said date. It is settled law that the charge created by introducing a new entry and consequently taxability thereupon, the question of imposing the duty retrospectively does not arise. The statutory provision did not provide brand promotion to be a taxable service during the relevant period.

Extended period of five years is not to be invoked unless there is something more positive then mere inaction or failure on the part of the assessee or conscious or deliberate withholding of information.