2007 (2) TMI 111 - AT - Service Tax

Demand (Service tax) - Department contended that appellant activity is covered under Business auxiliary service and accordingly demand were made - Matter remanded to Commissioner (A) for fresh decision and ordered for pre-deposit of Rs.1lakh

Summary

Issues:
1. Demand of service tax and penalty amount
2. Waiver of pre-deposit and stay of recovery
3. Classification of service as "Business Auxiliary Service" or "Recovery Agent's Service"
4. Compliance with Section 35F of the Central Excise Act, 1944
5. Change of address affecting the appeal process

Analysis:

1. The lower authorities demanded service tax and penalty from the appellants for services rendered to clients. The party did not appear before the Commissioner (Appeals) despite notices. An interim order for pre-deposit under Section 35F of the Central Excise Act was not received by the party, leading to the dismissal of the appeal. The appeal before the Appellate Tribunal challenges this dismissal for non-compliance with Section 35F.

2. The appeal was filed against the appellate Commissioner's order, and it was found that the party had changed addresses. The Tribunal issued a notice to the address in the appeal memorandum, which was returned. As there was no updated address provided, the Tribunal decided not to keep the application and appeal pending any longer.

3. The appellants collected payments for clients like M/s. ICICI Limited and M/s. LIC Housing Finance Corporation Limited. The Department classified this service as "Business Auxiliary Service," leading to the demand. The appellants argued that the service was categorized as "Recovery Agent's Service" when it became a taxable service, and thus should not be treated as "Business Auxiliary Service." The Department contended that the service fell under the definition of "Business Auxiliary Service" under the Finance Act, 1994.

4. After reviewing the provisions, the Tribunal found that the appellants' activity fell within the scope of "Business Auxiliary Service" as an incidental or auxiliary support service. The appellants were directed to pre-deposit a specific amount within a set timeframe for the appeal to proceed on merits. The impugned order was set aside, and the appeal was allowed by way of remand.

5. The issue of change of address impacted the appeal process, with the Tribunal deciding not to prolong the application and appeal due to the lack of updated information from the appellants.

In conclusion, the Tribunal's judgment addressed the demand for service tax and penalty, compliance with Section 35F, the classification of services, and the impact of a change of address on the appeal process.