2012 (12) TMI 672 - AT - Service Tax

Business Auxiliary Service and Custom House Agent s services - denial of CENVAT Credit - Held that - The appellant has been taking a plea before the authorities that the General Manager of the appellant was shown various heads of income, according to him which may not be for the services rendered. As against such an admission and also the evidence which is produced by the appellant it if found that the adjudicating authority has only considered all these incomes under the category of Business Auxiliary Service without classifying the same under which category services may fall as per the definition of Business Auxiliary Service prior to February 2007 and post February 2007 under CHA services. In the absence of any such finding, no conclusion can be reached in the matter. Also in the appellant s own case, the co-ordinate Bench has remanded the matter back to adjudicating authority - in favour of assessee by way of remand.

Summary

Issues involved:
Service Tax liability under Business Auxiliary Service and Custom House Agent services.

Analysis:

1. Service Tax liability under Business Auxiliary Service:
The appellant argued that the services provided do not fall under Business Auxiliary Services, citing examples of charging basic payments with added margin and collecting Customs duty as part of services. The appellant submitted extensive records to justify their claim. The adjudicating authority, however, confirmed the demand without proper classification of services. The Tribunal noted that in a similar case, the matter was remanded back to the adjudicating authority. The Tribunal found discrepancies in the adjudication order and directed a re-consideration of the issue after following the principles of natural justice.

2. Service Tax liability under Custom House Agent services:
The appellant contested the Service Tax liability under CHA services, arguing that the adjudicating authority did not consider all aspects and failed to provide proper opportunity for explanation. The Tribunal observed that the demand was confirmed without hearing the appellant on the application of relevant clauses. Various charges like Terminal Handling Charges and EDI charges were brought into the tax net without proper examination. The Tribunal granted a waiver of pre-deposit of balance dues for admission of the appeal, considering the deposits already made sufficient under Section 35F of the Central Excise Act.

3. CENVAT Credit denial:
The adjudicating authority denied CENVAT Credit to the appellant without proper consideration of the nature of services rendered. The Tribunal found that the appellant did not provide adequate assistance in reconciling figures and explaining the charges collected. The Tribunal directed the appellant to submit detailed income information with supporting documents to assist in a fresh adjudication.

4. Overall Decision:
After considering submissions from both sides on the Stay Petition, the Tribunal decided to dispose of the appeal at that juncture due to the narrow compass of the issue. The Tribunal set aside the impugned order and remitted the matter back to the adjudicating authority for a fresh consideration while keeping all issues open. The appeal was allowed by way of remand, without expressing any opinion on the merits of the case.

In conclusion, the judgment addressed the complexities surrounding the Service Tax liability under Business Auxiliary Service and Custom House Agent services, highlighting the need for proper classification, examination of charges, and adherence to natural justice principles in adjudication. The Tribunal emphasized the importance of providing detailed assistance and supporting documents to facilitate a fair assessment of tax liabilities.