2010 (1) TMI 958 - Commissioner - Service Tax

Summary

Issues: Appeal against service tax demand u/s 70 & 78 of the Act for guarantee commission received under 'business auxiliary service' (BAS) category.

Brief facts: The appellant received Rs. 200,000 as guarantee commission for standing surety for a company. Show Cause Notice issued for service tax under BAS category. Impugned order confirmed Rs. 16,000 with interest and penalty.

Grounds of appeal: 1. Absence of client/principal relationship as appellant is a director of the company. 2. Claim for exemption based on delayed receipt of commission and supported by Notification No. 06/2005-S.T. and Board Circular No. B-1/6/2005/TRU.

Findings: The appellant, being a director of the company, received commission approved by the board of directors. Absence of client/principal relationship as required for BAS classification. Commission cannot be considered for levy of service tax. Impugned order set aside, appeal allowed.