2014 (1) TMI 1603 - AT - Service Tax

Demand of service tax - Marketing research in relation to steel products - Imposition of interest and penalty - Held that - Show Cause Notice the appellant specifically gave details of his activities which is not in respect of market research agency service. The payment made by M/s Kalyani Carpenter also in respect of professional fee in respect of metal development. In view of this, appellant had not provided any taxable service in respect of market research agency - Decided in favour of assessee.

Summary

Issues:
- Appeal against the impugned order passed by Commissioner (Appeals) demanding Service Tax for conducting marketing research in relation to steel products.
- Interpretation of the nature of services provided by the appellant.
- Assessment of evidence presented by the appellant regarding compensation received from a specific company.
- Analysis of the contention that the appellant did not provide market research agency services.

Analysis:
The appellant filed an appeal against the demand for Service Tax based on a Show Cause Notice alleging engagement in market research agency services related to steel products. The adjudicating authority upheld the demand and imposed penalties, which was affirmed by the Commissioner (Appeals), leading to the present appeal before the Appellate Tribunal.

During the proceedings, the appellant, represented by Mr. Uday Telang, produced evidence in the form of a bank voucher from M/s Kalyani Carpenter Special Steels Ltd., Pune, indicating payments made to the appellant for consultancy services in metal development. The appellant contended that the payments were professional fees for his expertise as an IIT Engineer, not for market research agency services.

The appellant further argued that his activities primarily involved industrial sales, providing information about products, and facilitating potential buyers to try out the company's products, rather than offering market research agency services. In response, the Revenue maintained that the appellant did provide taxable market research agency services, supporting the lower authority's findings.

Upon review, the Tribunal found that the appellant's activities, as detailed in the response to the Show Cause Notice and supported by the payment evidence, were not indicative of market research agency services. The Tribunal accepted the appellant's explanation that the payments received were for professional services in metal development, not for market research. Consequently, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant.

In conclusion, the Tribunal's decision focused on the nature of services provided by the appellant, emphasizing the distinction between market research agency services and consultancy in metal development. The analysis of evidence and the appellant's activities led to the determination that the appellant did not engage in taxable market research agency services, resulting in the appeal being allowed and the impugned order being overturned.