2012 (6) TMI 666 - AT - Service Tax

Stay Petition for waiver of the duty confirmed Revenue has sought Service Tax under the category of Business Auxiliary Service assessee stated that Service Tax liability for the first year needs to be computed after giving them the benefit of small scale exemption and in the second year, the amount which has not been included by them in the Service Tax returns was in respect of the services rendered on behalf of the client and that also in relation to agriculture Held that -As first adjudicating authority while disposing the issue of eligibility of small scale exemption, specifically records that the appellant is eligible for small scale exemption, but includes the said amount for confirmation of demand - as regards the claim in respect of the services rendered in relation to agriculture on perusal of the definition and the related notification on the tax liability under Business Auxiliary Service the appellant may be eligible for the benefit of exemption notification as regards services provided in relation to agriculture - set aside the impugned order and remand the matter back to adjudicating authority to reconsider the issue afresh, after following the principles of natural justice in favour of assessee.

Summary

Issues Involved:
Stay petition for waiver of confirmed amounts due to non-compliance of pre-deposit order.
Service Tax liability under Business Auxiliary Service for 2005-2006 and 2006-2007.
Eligibility for small scale exemption and services rendered in relation to agriculture.

Analysis:

1. The Stay Petition was filed for waiver of confirmed amounts due to non-compliance of the pre-deposit order. The Tribunal found the issue to be narrow and proceeded to dispose of the Stay Petition before taking up the appeal itself for disposal. Both parties were heard, and the records were perused to understand the case.

2. The Revenue sought Service Tax under the category of Business Auxiliary Service for the years 2005-2006 and 2006-2007. The appellant argued for small scale exemption for the first year and claimed that the services provided in the second year were in relation to agriculture, as per the agreement with a specific client. The lower authorities' findings were reiterated by the Revenue.

3. The Tribunal observed that the first adjudicating authority had acknowledged the appellant's eligibility for small scale exemption but still included the amount for demand confirmation. Regarding the services provided in relation to agriculture, the findings were deemed sketchy with no clear conclusions. After reviewing the tax liability regulations and related notifications, the Tribunal opined that the appellant might qualify for exemption concerning services related to agriculture. Consequently, the lower authorities were deemed to have erred in their conclusions. Since the adjudicating authority had not provided detailed findings on the services related to agriculture, the Tribunal set aside the order and remanded the matter for a fresh consideration following the principles of natural justice.

4. The appeal was allowed by remanding the case to the adjudicating authority for a thorough reconsideration of the issues, particularly the eligibility for small scale exemption and the nature of services provided in relation to agriculture. The Tribunal ensured that all issues were kept open for further examination. The judgment was dictated and pronounced in court by the Tribunal.