TMI Blog2018 (6) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, 1994. Demand upheld - appeal dismissed - decided against appellant. - ST/157/2007, ST/3 & 4/2012, ST/41856/2014 - Final Order Nos. 41401-41404/2018 - Dated:- 12-2-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) and Shri Madhu Mohan Damodhar, Member (Technical) Shri V. Ravindran, Advocate for the Appellant Shri K.P. Muralidharan, AC (AR) for the Respondent ORDER Brief facts of the case in all appeals is that the appellants herein were providing bed rolls to upper class railway passengers of Southern Railways as per contracts awarded to them by the latter. Department took the view that the said activity would be in the nature of a customer care service provider on behalf of the Railways and hence would fall within the ambit of Business Auxiliary Service as defined under section 65(19) during the periods of dispute. Accordingly, show cause notices were issued for different periods. In respect of period July 2003 to September 2006, show cause notice dated 27.12.2006 was issued which culminated in an adjudication order No.15/2007 dated 30.4.2007 inter alia demanding tax liability of ₹ 74,35,664/- with interest. Aggrieved, appellants have filed Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 41285/2015 dated 15.10.15 2. All the appeals directed to be linked for common disposal ST/3 4/2012 10/06 to 8/07 9/2007 73/08 dt. 1.4.08 32/08 dt. 20.10.08 72/08dt. 20.9.08 and 08/09 dt. 16.2.09 28,87,329 and 2,03,748 OIA Nos. 50 51/2011 dated 25.4.2011 (common) Final Order No. 40568 40569/14 dt. 27.6.2014 CESTAT CMA 164 165/15 HC Order dt. 27.2.15 with directions to decide on merits 3. When the matter came up before this Tribunal, vide Final Order Nos. 40568 40569/2014 dated 27.6.2014, the appeals were rejected as time-barred. The appellants filed CMA No. 164 165/2015 before the Hon ble High Court of Madras. The Hon ble Court vide order dated 27.2.2015 ordered as follows:- 11. It is trite law that limitation has to be reckoned only from the date when the actual service has been effected, subject to fulfilling the mandatory requirement of showing proof of delivery. In the case on hand, the service of notice was effected on the appellant only on 23.12.2011 and there is nothing on the record to show that it was served on 9.5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Client , the definition of this expression as ordinarily understood / dictionary mean has to be considered. This term as per Black s Law dictionary means an individual, corporation, trust or estate that employs a professional to advice or assist it in the professional s line of work, professionals include but are not limited to attorney, accountants, architects etc. (d) Rest of the submissions reiterated as per grounds of appeal, written submissions dated 03.06.2015 and 04.12.2017 4.2 Ld. Advocate made these submissions:- a) Assuming but not admitting even if the activities of the appellant are taxable, the same would be exempted upto 01.10.2012 as per under Sec.99 of the Finance Act, 2013. The Hon ble High Court recognized this contention in para 4 of its order dated 20.11.2015 in WP No. 13262 of 2015 and WA No. 744 of 2015. The department did not object to this, but only countered about the delay in the High Court proceedings. b) Service tax being destination based tax, the above provisions would squarely insulate the appellant, as he cannot pass on service tax to either railways or to the passengers of railways. c) There were decisions to confirm that the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Service Tax, Delhi 2018 (8) GSTL 220 (Tri. Del.) 6. Heard both sides and have gone through the facts on the matter. 6.1 To understand the disputed issue in perspective, it would be useful to recapitulate the definition of Business Auxiliary Service in Section 65 (19) of the Finance Act, 1994 which was in force during the relevant period. The definition as it stood vide amendment on 10.9.2004, made by Finance Act (23 of 2004), 2004 reads as under : - iii) for clause (19), the following clauses shall be substituted, namely;-- '(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 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lasses and charges thereof collected by appellant from railways, will fall under the mischief of Customer Care Service provided to the Railways as taxable under Business Auxiliary Service . 6.4 No definition of Customer Care has been given in Section 65 (19) or for that matter anywhere else in the Finance Act, 1994. As per the Oxford Dictionary, Customer Care is defined as assistance and support provided by a company to those people who buy or use its products or services . Customer Care service is also often explained as provision of service to customers, before, during and after a purchase , as the process of looking after customers to best ensure their satisfaction with the business and its goods and services. The underlining motive to provide customer care services is the desire to maintain ongoing client relationship and loyalty. The railways provide bed rolls to the upper class passengers who undisputedly have to shell out considerable more ticket price as compared to second class passengers, to ensure their comfort, as a customer initiative. In our view, the appellant when performing its activities and providing these services of supply of bed rolls, free of char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wth and development by being safe, financially viable, environment-friendly and caring for its customers and employees. (emphasis supplied) The Vision and Mission Statements thus indicate that Railways are inter alia, customer focused and to care for customers who are none other than their passengers. The supply of bed rolls to upper class passengers is one such endeavour of the Railways to provide customer care to its passengers. 6.7 Viewed in this light the Railways are indubitably the client of the appellant since they perform the said customer care service on behalf of the railways. In the event, the activities carried out by the appellant will definitely come within the scope of Customer Care Services provided on behalf of the client and hence will be exigible to service tax under Business Auxiliary Service as defined under Section 65 (19) of the Finance Act, 1994. 6.8 Ld. Advocate has also contended that even if it is considered that the services rendered by the appellants are taxable, the same would be exempted by virtue of Section 99 of the Finance Act, 2013 w.e.f. 10.05.2013 which has exempted taxable services provided by Indian Railways during the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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