2013 (6) TMI 361 - AT - Service Tax

Business Support Services - collected of excess amount to undertook the activity of registration of the car on behalf of the buyers with the RTO authorities - Dealer of Maruti Cars - Held that - To qualify within this definition of Support services of business or commerce the activity undertaken as described should be in relation to business or commerce. When a customer purchases a car from dealers and services are rendered in relation thereto, it cannot be said that the services has been rendered in relation to business or commerce. Therefore Service Tax demand under the category of Business Support Services is not sustainable in law. Assessee granted waiver from pre-deposit of the dues adjudged and stay recovery thereof during pendency of the appeal.

Summary

Issues:
Service Tax liability on amounts collected by the appellant for registration of motor cars on behalf of buyers.

Analysis:
The appeal before the Appellate Tribunal CESTAT Mumbai challenged the Order-in-Appeal passed by the Commissioner of Central Excise & Service Tax (Appeals), Pune-I, confirming a Service Tax demand of Rs.3,27,406/- on amounts collected by the appellant, a dealer of motor cars, for registration activities. The appellant collected amounts from buyers for registration, sometimes in excess, which the department viewed as liable to Service Tax under 'Business Support Services'. The lower appellate authority had rejected the appeal, leading the appellant to approach the Tribunal.

The Tribunal analyzed the definition of "Support services of business or commerce" under Section 65(104c), which includes various services related to business activities. The Tribunal noted that for an activity to fall under this definition, it must be in relation to business or commerce. In this case, the services provided by the appellant for registering cars purchased by customers were not directly related to business or commerce. Therefore, the Tribunal held that the Service Tax demand under the category of 'Business Support Services' was not sustainable in law.

Consequently, the Tribunal granted a waiver from pre-deposit of the dues adjudged against the appellant and stayed the recovery of the amount during the pendency of the appeal. This decision was based on the finding that the services provided by the appellant did not qualify as 'Support services of business or commerce' under the relevant legal provisions.