TMI Blog2014 (6) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 10-9-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and demanding service tax amounting to Rs. 1,37,36,500/- along with interest thereon and also proposing to impose penalties. The said notice was adjudicated vide the impugned order wherein the demands were confirmed and penalties imposed. Aggrieved of the same, the appellant is before us. 3. The arguments advanced by the ld. counsel for the appellant can be summarized as follows:- (a) Neither in the show cause notice nor in the impugned order, is there any proposal or a finding specifying the sub-clause of BAS under which the activities undertaken by the appellant fell so as to merit classification under BAS. The definition of BAS itself underwent many changes and the scope of the service was expanded to cover many activities both in 2004 and 2005 by amending the statutory definitions. In the absence of such a finding in the impugned order, there is no clarity and hence the order of the adjudicating authority is bad in law and merits to be set aside. Reliance is placed on the decisions of the apex Court in the case of Gajanan Vigneshwar Birjupur [1994 (72) ELT 788 (SC) and of the Tribunal in United Telecom Ltd. [2011 (22) STR 571]. (b) BAS encompasses services onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax demand, the adjudicating authority has not given the benefit of cum-tax and reliance has been placed on various judicial pronouncements in this regard. (g) Penalties have been imposed on the appellant both under sections 76 and 78 of Finance Act, 1994 which is incorrect and reliance is placed on the decisions in the case of First Flight Courier Ltd. [2011 (22) STR 622 (P H) and Motor World [2012 (27) STR 225 (kar.)]. (h) There was confusion in the trade on the scope of BAS at the relevant time and thus there was reasonable cause for failure in payment of tax. Therefore, provisions of Section 80 should have been invoked and penalties waived as held by the Tribunal in the case of Marudhamalai Murugan Indusrtries [2009 (15) STR 56] and Prakash Decorators [2008 (10) STR 475]. In view of the above submissions, it is prayed that the impugned order be set aside and the appeal allowed. 4. The ld. Addl. Commissioner (AR) appearing for the Revenue contended as follows: (1) In addition to acting as Steamer Agent, the appellant also rendered various services for a consideration to importers and exporters such as filing/amendment/surrender of Bill of Ladi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) any incidental or auxiliary support service such as billing, collection or recovery of cheques, accounts and remittance, evaluation of prospective customer and public relation services, and includes services as a commission agent, but does not include any information technology service. business auxiliary service means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production of goods on behalf of the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) deals with goods or services or documents of title to such goods or services; or (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchase of such goods or services; (b) information technology service means any service in relation to designing, developing or manufacturing of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer systems; 5.2 In their memorandum, the appellant has admitted that they are not disputing the payment of service tax under BAS as a commission agent with effect from 16-6-05 and has paid the tax along with interest which has been appropriated in the impugned order. They dispute their liability to pay service tax before 16-6-2005 as customer management service on various grounds. 5.3 As regards the first ground that the show cause notice does not mention the clause of 65 (19) under which their liability arose, we have perused the show cause notice. In para 3.1 of the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contention of the appellant that they were not liable to pay service tax prior to 16-6-2005. 5.5 The contention of the appellant that to come under BAS, there should be 3 parties and the service should have been rendered on behalf of the client , this argument is also incorrect for the following reason. Rendering of service on behalf of the client applies only to sub-clauses (iii), (v) and (vi) which relate to customer care management, production of goods and provision of services. The said condition does not apply to cub-clause (iv) which deals services rendered to the client and consequently to sub-clause (vii) which is incidental or auxiliary to the service under sub-clause (iv). Similarly the condition on behalf of also does not apply to services specified in sub-clauses (i) and (ii) of section 65 (19) apart from sub-clause (iv). Therefore, this contention of the appellant has to be rejected outright. 5.6 The next question is whether the activity of the appellant was taxable prior to 10-9-2004. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Further the appellant did not disclose these activities to the department nor did he declare the consideration received in the statutory ST 3 returns filed during the said period. This conduct of the appellant does amount to suppression of facts and hence the extended period of time has been rightly invoked to confirm the demand. The hon'ble High Court of Gujarat in the case of Neminath Fabrics [2010 (256) ELT 369 (Guj).] and a larger bench of this Tribunal in the case of Union Quality Plastic Ltd. [2013 (294) 222 (Tri-LB)] held that in a case of non-levy or short-levy or non-payment or short payment of duty in any of the circumstances enumerated in the proviso to section 11A (1) of the Central Excise Act, where suppression or willful omission was either admitted or demonstrated, invocation of extended period of limitation was justified. Following the ratio of these decisions, in the present appeal before us, we uphold the invocation of extended period of time for confirmati ..... 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