2012 (8) TMI 46 - AT - Service Tax

Business Auxiliary Services distributor of garments - small scale exemption in terms of Notification No.6/2005 Held that - matter remanded to original adjudicating authority for deciding the issue of applicability of small scale notification, afresh in the light of the observations made by the Tribunal in the case of Peoples Automobiles Ltd. (2011 (8) TMI 903 (Tri))

Summary

Issues: Availability of small scale exemption under Notification No.6/2005 for service tax on 'Business Auxiliary Services'.

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the issue at hand involves the availability of exemption under Notification No.6/2005 for service tax on 'Business Auxiliary Services'. The appellant, a distributor of garment items and washing products manufactured by a company, had the service tax confirmed against them under the category of 'Business Auxiliary Services'. The appellant contested the demand on merit and limitation, and also sought small scale exemption under the notification. The lower authorities denied the exemption, stating that the appellant was providing services under the brand name of the manufacturer. The appellant argued that providing services to a brand name owner should not disentitle them from the benefit of the Notification. The Tribunal's decision in a similar case was cited in support of this argument.

The Tribunal, after dispensing with the condition of pre-deposit of duty and penalty, proceeded to decide the appeal. The issue of availability of exemption under the Notification was thoroughly discussed. The Tribunal referred to a previous judgment where it was held that the exemption does not apply to services provided under a brand name of another person. In this case, the services were provided under the appellant's own name to banks and other institutions, not using the brand name of the recipients. Therefore, the Tribunal concluded that the appellant was entitled to the benefit of the Notification. The impugned order was set aside, and the matter was remanded to the original authority for re-adjudicating the liability based on the Tribunal's rulings.

In conclusion, the Tribunal allowed the appeal, remanding the matter for a fresh decision on the applicability of the small scale exemption under Notification No.6/2005. The appellant was given the opportunity to contest the demand on other issues of merit and limitation. The stay petition and appeal were disposed of accordingly.