2011 (4) TMI 399 - AT - Service Tax

Waiver of pre-deposit - Business auxiliary service (BAS) - readings of electricity meters of customers - Services provided directory to client or on behalf of the client - Held that - Tribunal has rendered conflicting decisions on the same dispute in two different orders. In the case of Gandhi & Gandhi, Chartered Accountant, dealing with an identical case, disposed recently, it was held that the impugned activity is not taxable under BAS and was taxable under BSS which was introduced in the statute in May, 2006 - appellant has made out a strong prima-facie case against the demand and penalties - Decided in favour of the assessee

Summary

Issues:
1. Classification of services under Business Auxiliary Services (BAS) or Business Support Service (BSS).
2. Liability for payment of service tax on services provided.
3. Interpretation of conflicting decisions by the Tribunal on similar disputes.

Analysis:
1. The judgment deals with the issue of classification of services provided by the appellant under either Business Auxiliary Services (BAS) or Business Support Service (BSS). The original authority classified the services under BSS, relying on a Tribunal decision in a similar case. The appellant contested this classification, citing the decision in the case of Gandhi & Gandhi, Chartered Accountant, where it was held that the activity falls under BSS and not BAS. The Tribunal noted the conflicting decisions on similar disputes but ultimately ruled in favor of the appellant, ordering a waiver of the confirmed dues.

2. The liability for payment of service tax on the services provided was a crucial aspect of the case. The appellant had received remuneration for recording electricity meter readings and raising bills for a power distribution company. The dispute arose regarding the applicability of service tax on these services. The original authority had dropped the demand based on the classification under BSS, but the Department appealed, leading to the confirmation of the liabilities. However, the Tribunal, after considering both sides, decided in favor of the appellant, granting a complete waiver of the dues confirmed against them.

3. An important issue addressed in the judgment was the interpretation of conflicting decisions by the Tribunal on similar disputes. The Tribunal acknowledged the conflicting decisions in different orders but relied on the recent decision in the case of Gandhi & Gandhi, Chartered Accountant, where it was held that the impugned activity is taxable under BSS and not BAS. This inconsistency in decisions led the Tribunal to conclude that the appellant had made a strong prima facie case against the demand and penalties, ultimately resulting in the waiver of the confirmed dues and a stay on recovery pending the appeal decision.

This detailed analysis highlights the key legal issues surrounding the classification of services, liability for service tax, and the interpretation of conflicting decisions by the Tribunal, culminating in the judgment granting a waiver of confirmed dues to the appellant.