2014 (2) TMI 1086 - AT - Service Tax

Waiver of pre-deposit - Business Auxiliary Service - collection of fly ash - Job work - Held that - To fall under Business Auxiliary Service, the activity undertaken should amount to producing or processing of goods on behalf of the client. In the present case, fly ash is produced by the Nasik Thermal Power Station. The appellant does not process or produce fly ash at all. They merely collect the fly ash from Nasik Thermal Power Station and delivers the same at the premises of his client M/s. Dirk India Ltd. in the vehicles given by M/s. Dirk India Ltd. Thus, the service is more appropriately classifiable under Cargo Handling Service and not under Business Auxiliary Service. In view of the above, the appellant has made out a strong prima facie case for waiver of pre-deposit of the dues adjudged. Accordingly, we grant waiver from pre-deposit of the adjudicated liabilities against the appellant and stay recovery thereof during the pendency of the appeal - Stay granted.

Summary

Issues:
Classification of services under Business Auxiliary Service for the period 2005-06 to 2009-10.

Analysis:
The appeal and stay petition were filed against Order-in-Appeal No. RPS/52/NSK/2013 dated 25/02/2013 by the Commissioner of Central Excise & Customs, Nasik, confirming a service tax demand of Rs.9,23,092 against the appellant for the period 2005-06 to 2009-10. The services rendered by the appellant to M/s. Dirk (India) Ltd. were classified as Business Auxiliary Service. The appellant contended that the nature of the job undertaken did not fall under Business Auxiliary Service as they did not produce or process any goods on behalf of the client. They collected fly ash from Nasik Thermal Power Station and delivered it to M/s. Dirk (India) Ltd. for further processing. The appellant argued that the entire demand was unsustainable in law. They had already made a partial payment against the confirmed demands and requested a stay.

The Revenue argued that the appellant had classified the service under Business Auxiliary Service and discharged the service tax liability for the period 2006-07 onwards, indicating that the service should also be classified as Business Auxiliary Service for the period 2005-06. The Revenue highlighted that the appellant did not appear before the adjudicating authority during the hearing. The Revenue contended that the impugned order was sustainable in law.

After considering the submissions from both sides, the Tribunal analyzed the nature of the activity undertaken by the appellant. The Tribunal observed that to fall under Business Auxiliary Service, the activity should involve producing or processing goods on behalf of the client. In this case, the appellant did not produce or process fly ash; they simply collected it from Nasik Thermal Power Station and delivered it to M/s. Dirk (India) Ltd.'s premises. The Tribunal concluded that the service provided was more appropriately classifiable under Cargo Handling Service rather than Business Auxiliary Service. Therefore, the Tribunal found that the appellant had made a strong prima facie case for waiver of pre-deposit of the adjudicated liabilities. Consequently, the Tribunal granted a waiver from pre-deposit and stayed the recovery of the dues during the appeal's pendency.