2014 (9) TMI 538 - AT - Service Tax

Business auxiliary services - assessee received Hi-Speed Oil from the refineries on payment of duty and added some fuel additives on HSD oil and marketed the same in the name and style of Extra-Mile Super Diesel . - revenue contended that additives were used in order to promote/market their product - Held that - assessee received the HSD oil from the refineries and added some fuel additives for marketing the same. - the addition of additives in their own units and selling to their customer, cannot be treated as a service provider. - no demand - decided against the revenue.

Summary

Issues:
Appeal against dropping of demand of service tax, interest, and penalty by Commissioner of Central Excise, Tirunelveli.

Analysis:
The appeal was filed by Revenue against the dropping of proceedings regarding the demand of service tax, interest, and penalty by the Commissioner of Central Excise, Tirunelveli. The case involved the respondents receiving Hi-Speed Oil from refineries, adding fuel additives, and marketing the product as "Extra-Mile Super Diesel." The Revenue argued that the addition of fuel additives was for promoting/marketing their product, falling under "Business Auxiliary Service" and subject to service tax. The respondents contended that a previous Tribunal order in their favor for a similar issue supported their position.

The Tribunal examined the records and noted that in the respondent's earlier case, the Tribunal had set aside the impugned order and allowed the appeal, emphasizing that the service rendered was to themselves and not to any external party. The Tribunal referred to a previous decision where it was held that no service tax was payable for services rendered within the same company. The Tribunal found that the addition of additives by the respondents in their own units and selling to customers did not constitute a service provider role, aligning with the previous Tribunal decision.

The Tribunal rejected the argument that buyers were the service receivers, emphasizing that the respondents added additives to the HSD oil received from refineries for marketing purposes. The Tribunal concluded that based on the previous decision in the respondent's case, there was no merit in the Revenue's appeal. Consequently, the Tribunal upheld the Commissioner's order and rejected the Revenue's appeal, while disposing of the cross objection filed by the respondent-assessee.

In summary, the Tribunal's decision was based on the interpretation of service tax liability for activities conducted within the same company, emphasizing that services rendered to oneself do not attract service tax. The judgment highlighted consistency with previous decisions and the specific circumstances of the case to determine the tax liability, ultimately upholding the Commissioner's order and dismissing the Revenue's appeal.