2013 (2) TMI 807 - AT - Service Tax

Business Support Service - services relating to registration of the car - Held that - The appellant is rendering assistance to their client in getting the motor vehicle registration done. The said activity, by no stretch of imagination, can be considered as supporting the business of their customers - the activity undertaken by the appellant does not come within the purview of Business Support Service . The issue should have been examined on merits by the lower appellate authority, which he has not done - appeal allowed by way of remand.

Summary

Issues: Classification of services under 'Business Support Service' and compliance with pre-deposit requirements.

Classification of services under 'Business Support Service': The appellant, a car dealer, provided registration services to buyers for which they charged a lump sum amount. The department classified these services as 'Business Support Service' and issued a demand notice for the excess amount retained by the appellant. The appellant contended that the classification was incorrect as they were assisting clients in vehicle registration, not supporting their business. The lower appellate authority dismissed the appeal for non-compliance with pre-deposit requirements. The Tribunal held that the activity did not fall under 'Business Support Service' as it did not support the business of customers. They directed the lower appellate authority to pass a speaking order on the merits without insisting on any pre-deposit, allowing the appeal by way of remand.

Compliance with pre-deposit requirements: The lower appellate authority directed the appellant to deposit the entire amount of Service Tax demanded, which the appellant argued would create a financial burden as they were utilizing borrowed funds. The appellant requested the case to be heard finally due to the interpretation of law involved. However, the lower appellate authority dismissed the appeal for non-compliance with pre-deposit provisions. The Tribunal found that the issue should have been examined on merits by the lower appellate authority without insisting on any pre-deposit, allowing the appeal by way of remand and disposing of the stay application.

This judgment highlights the importance of correctly classifying services for tax purposes and the need for authorities to consider the merits of a case before dismissing appeals based on procedural grounds.