2013 (6) TMI 808 - AT - Service Tax

Summary

Issues Involved:
1. Jurisdiction of Commissioner Service Tax, Mumbai.
2. Liability to pay Service Tax on "Data Confirmation and Information Dissemination" (DCID) services.
3. Classification of services under "Business Auxiliary Service" (BAS).
4. Specification of precise clause of BAS in the show cause notice.
5. Value on which Service Tax liability has to be discharged.
6. Invocation of extended period for confirmation of Service Tax demand and imposition of penalties.

Summary:

Jurisdiction of Commissioner Service Tax, Mumbai:
The appellant challenged the jurisdiction of the Commissioner Service Tax, Mumbai to adjudicate the case. This issue was dismissed as not maintainable based on a prior Tribunal decision in the case of Standard Chartered Bank & Ors. v. Commissioner of Service Tax, Mumbai.

Liability to Pay Service Tax on DCID Services:
The appellant, engaged in "Manpower Recruitment or Supply Agency Service" and "Business Auxiliary Service," was found to have rendered DCID services for ICICI Bank without discharging Service Tax liability. The investigation revealed a differential Service Tax liability of Rs. 25,84,53,236/-. The appellant contested the demand, claiming they acted as "pure agents" and were not liable for the gross amount received from ICICI Bank.

Classification of Services under BAS:
The show cause notice proposed to classify the services under BAS, stating that any Customer Care Service provided on behalf of the client is covered under BAS. The adjudicating authority confirmed this classification, holding that the appellant was promoting or marketing the services provided by ICICI Bank, providing customer care, and evaluating prospective customers.

Specification of Precise Clause of BAS in the Show Cause Notice:
The appellant argued that the show cause notice and the impugned order did not specify the precise clause of BAS under which they were liable to pay Service Tax. The Tribunal found this argument without merit, stating that the demand does not get vitiated even if a wrong provision is quoted in the show cause notice, as held by the Apex Court in Pradyumna Steel.

Value on Which Service Tax Liability Has to Be Discharged:
The Tribunal held that the Service Tax liability should be discharged on the total amount charged and received for the services rendered, including the payout per data confirmation. The appellant's argument of acting as a pure agent was rejected based on the agreements on record, which indicated a principal-to-principal relationship with ICICI Bank.

Invocation of Extended Period for Confirmation of Service Tax Demand and Imposition of Penalties:
The Tribunal upheld the invocation of the extended period for confirmation of the Service Tax demand and imposition of penalties, citing suppression of information by the appellant and non-filing of returns for the period 2007-08.

Order:
The appellant was directed to make a pre-deposit of 50% of the Service Tax demand confirmed against them within 8 weeks, with the balance of Service Tax, interest, and penalties stayed during the pendency of the appeal.