TMI Blog2013 (6) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors. v. Commissioner of Service Tax, Mumbai reported in 2013-TIOL-558-CESTAT-MUM. Accordingly, the Misc. application is also dismissed as not maintainable. 2. The appellant, M/s. George Maintenance Services Pvt. Ltd. (GMS in short), Mumbai are engaged in rendering services of Manpower Recruitment or Supply Agency Service and Business Auxiliary Service and are registered with the Service Tax Department. Based on intelligence, the department conducted investigation into the activities of the appellant and found that since 2003, the appellant had been rendering the service of Data Confirmation and Information Dissemination (DCID in short) for M/s. ICICI Bank and they had been receiving consideration from the said bank for rendering of the services. However, they had not discharged Service Tax liability on the said activity and misdeclared the consideration received in the ST-3 returns filed with the department. For the period 2007-08, the appellant had not filed the returns at all. Investigation conducted revealed that during the period 1-4-2004 to 31-3-2007, they had declared in the Service Tax returns the taxable value as ₹ 17,76,43,847/- and had paid Service Tax of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax under the category of Business Auxiliary Services . (4) Neither the show cause notice nor the impugned order specify the clause of Business Auxiliary Service under which they are liable to pay Service Tax and therefore, the matter should be remanded back to the adjudicating authority for consideration afresh by first putting the appellant to notice about the precise clause of Business Auxiliary Service under which the liability has arisen. (5) Reliance is placed on the decision of the Tribunal in the case of United Telecom Ltd. [2011 (22) S.T.R. 571] wherein it has been held that unless the notice specifies the precise ground/provision of the law on which tax is proposed to be demanded, the demand would be unsustainable in law. In view of the above, the ld. Counsel prays for grant of stay and remanding the matter back to the adjudicating authority for fresh consideration. 4. The ld. Commissioner (AR) appearing for the Revenue, on the other hand, strongly opposes the plea made by the appellant. He submits that in spite of sufficient opportunity given to the appellant at the adjudicating stage, the appellant did not cooperate with the department and file their fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suitable personnel as may be required for the performance of the services. The personnel so engaged shall work under the supervision, control and direction of the appellant and the appellant shall be solely responsible for their salaries/wages/statutory payments, etc. The service provider was responsible for compliance with all the laws with regard to engagement of the personnel and confidentiality of the information collected. The appellant as service provider was also responsible for insurance against dishonesty, theft, extortion, robbery, forgery, fraud, etc., on the part of the service provider employees, agents/sub-contractors or representatives. The agreement was on a principal to principal basis. 5.1.2 As per Clause 4 of the agreement read with Schedule B, the Bank will provide the appellant a monthly consideration of ₹ 50,000/- plus payout per data confirmation as applicable at the time for services rendered by them. The said clause also provided that the appellant as service provider shall be solely liable for the payment of all central, state and local levies, taxes, duties, fines and penalties (including without limitation, service tax, sales taxes, value added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended for use by the client; (v) production or processing of goods for, or 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 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 activity that amounts to manufacture of excisable goods. Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) commission agent means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person - (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 collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misrepresentation of facts and we hold accordingly. 5.2.5 Now let us see whether the ratio of the decision in United Telecoms Ltd. case is applicable to the facts of the present case. The appellant therein provided service of collection of electricity and telephone bills and issuance of birth/death certificates under e-seva project of the Government. Show cause notice was issued proposing to classify the activity rendered under Business Auxiliary Service (BAS) and Business Support Service (BSS) and the duty demand was also confirmed under both the services. In other words, the same activities were classified under two services BAS and BSS. It was in that context, it was held that in the absence of proposal in the show cause notice as to the liability of the assessee under the precise provision in the Act, the demand was unsustainable. In the case before us, the facts are completely different and distinguishable. Service Tax demand has been made only under BAS and the demand has been confirmed holding that the activity undertaken amounted to promotion/marketing of the service rendered by the client as also evaluation of a potential customer which is a service incidental or ancil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement. In view of the specific provisions in the agreements pertaining to the transaction, it is very clear that the appellant was not acting as a pure agent. Therefore, the liability to pay Service Tax on the payouts for data confirmation was squarely on the appellant and therefore, the confirmation of Service Tax demand along with interest on the appellant by the adjudicating authority cannot be assailed at all. 5.4 From the records, it is clear that the appellant had suppressed the information regarding receipts of consideration from the Bank and furnished grossly understated the figures in the Service Tax returns filed. Further during 2007-08, the appellant did not file any returns at all. The Revenue had to obtain the relevant data for computation of demand from the Bank and from the books of account recovered during investigation. In view of the factual position as discussed above, invocation of extended period of time for confirmation of Service Tax demand and imposition of penalties on the appellant appear to be sustainable in law. 5.5 The appellant has not pleaded any financial hardship nor any evidence placed before us in that respect. As discussed above, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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