2011 (5) TMI 468 - AT - Service Tax

Waiver of pre-deposit - Penalty - Business Auxiliary Services - The terms of understanding through agreement demonstrates that appellant was providing service to the principal IBP Co. Ltd. to achieve its object- One of such object was promoting or marketing of goods of that company - When the appellant served the principal granting liberty to the later to control the former in respect of agreed terms, the appellant s liability under Finance Act, 1994 arose for promoting sale of goods of the IBP Co. Ltd - For no pleading of reasonable cause if any, in the grounds of appeal and finding no evidence to interfere to the impugned order, the appellant is also disentitled to relief on penalty - Appeal is dismissed

Summary

Issues:
1. Absence of the appellant during the appeal hearing.
2. Examination of the grounds of appeal filed by the appellant.
3. Challenge to the sustainability of the First Appellate Authority's Order.
4. Analysis of the agreement between the appellant and IBP Co. Ltd.
5. Consideration of penalty levied on the appellant.

Issue 1 - Absence of the Appellant:
The appellant was absent during the appeal hearing, and no adjournment application was filed. The case had been rolling on the board for disposal, and it was the fourth occasion of listing. Despite the absence of the appellant, an ex-parte order was passed after an extensive inquiry into the material facts.

Issue 2 - Examination of Grounds of Appeal:
The grounds of appeal filed by the appellant included arguments that the appellant provided infrastructure and manpower for the Principal, IBP Co. Ltd., and that sales tax and service tax were mutually exclusive. The appellant challenged the sustainability of the First Appellate Authority's Order dated 07.09.2007.

Issue 3 - Challenge to the Sustainability of the Order:
The appellant challenged the sustainability of the First Appellate Authority's Order, arguing that the authority did not examine the agreement between the appellant and IBP Co. Ltd. However, the appellate authority had examined the agreement and provisions of law, concluding that the appellant provided Business Auxiliary Services.

Issue 4 - Analysis of the Agreement:
The agreement between the appellant and IBP Co. Ltd. dated 26.09.2003 outlined the appellant's obligations, including improving the efficiency of IBP Co. Ltd.'s business, being a custodian of stock, and meeting required sales volume. The terms of the agreement demonstrated that the appellant provided services to IBP Co. Ltd. to achieve its objectives, including promoting or marketing the company's goods.

Issue 5 - Consideration of Penalty:
Upon careful examination of the grounds of appeal, it was found that the appellant did not present any reasonable cause to be immune from the penalty levied. As there was no evidence to interfere with the impugned order and no grounds for relief on penalty, the appellant was disentitled to relief, and the First Appellate Authority's order was sustained, leading to the dismissal of the appeal.

Conclusion:
The Appellate Tribunal, after thorough examination and consideration of the issues raised, upheld the First Appellate Authority's order, dismissing the appeal due to the appellant's absence, lack of grounds for penalty relief, and the nature of services provided as per the agreement with IBP Co. Ltd.