TMI Blog2017 (2) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... tion cannot be considered as disclosure of information. The appellants were engaged in providing the service much before the recording of statement and they had not voluntarily come forward to pay service tax on the service or to disclose the full details to the Revenue - extended period rightly invoked. Benefit of N/N. 12/2003-ST and/or exclusion of the cost of material used during the provision of service - Held that: - To avail the notification they have to prove that they had sold the goods during the provision of service to the client and produce necessary evidence like payment of VAT to establish the same. Abatement of the value of the goods and material consumed - pure agent or not - Rule 5(2) of the Service Tax (Determination of Value of Taxable Services) Rules, 2006 - Held that: - as the appellants are service providers to MSDECL and service tax is payable on the value recovered by the appellants from the service receiver. The claim of deduction, if any, has to be supported by N/N. 12/2003-ST or the Service Tax (Determination of Value of Taxable Services) Rules, 2006. It is seen that the appellants do not qualify for any such deduction. Appeal dismissed - decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n defined as follows:- Section 65(19) - 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 Explanation : For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, inputs means all goods or services intended for use by the client. (v) production or processing of goods for, or on behalf of, the client; (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clause (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 informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to under what clause the service would be classifiable. Further, the decision in the case of Gandhi Gandhi Chartered Accountants relies on Board s circular dated 28.2.2006 to state that only services provided on behalf of the appellant would be falling under the business auxiliary service. It can be seen that clause (vi) of the definition of business auxiliary service only refers to the services provided on behalf of the client. It is not necessary for every service to qualify under the definition of business auxiliary service to be provided on behalf of the client. On these grounds, the decision of the Tribunal in the case of Gandhi Gandhi Chartered Accountants (supra) is distinguishable. 3.1 The CBEC clarification vide letter No. 334/4/2006-TRU, dated 28.2.2006 in respect of business support services reads as follows:- 3.13 Business Support Services : Business entities outsource a number of services for use in business or commerce. These services include transaction processing, routine administration or accountancy, customer relationship management and tele-marketing. There are also business entities which provide infrastructural support such as providing inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry service clause (vii) as billing. The claim of the appellant that they are engaged in providing information technology service is based on the fact that they are using a handheld device and taking pictures of the meter and generating bills using a programmable device. As can be seen from the above activity, the prime purpose of the activity is to generate bills and it is only incidental that electronic programmable devices are used for this purpose. The use of this device cannot change the nature of the services. The service would have been taxable, even if they had not used these devices and simply gone to MSEDCL s customers residence and taken the reading of the bill and prepare the bill by hand and handed over to the customers with a copy to MSEDCL. The service would have still qualified to be a business auxiliary service of the activity of billing. The use of handheld device does not change the nature of the service. The contract with MSEDCL also describes the service in its subject as order for spot-billing with the help of handheld programmable machine under Municipal Corporation area, Kolhapur . It can be seen that the service received is that of billing and the use of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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