2015 (1) TMI 456 - AT - Service Tax

Business Auxiliary Service - Revenue is of the view that the additional handling charges and the facilitation charges are leviable to service tax under the category of Business Auxiliary Service - Held that - In this case, although ZIL placed an order on the appellant for procurement of Naptha and furnace oil, as per the agreement the transactions are on principal to principal basis i.e. the appellant is the seller, ZIL is the buyer. The appellant has imported the impugned goods in their own account and in their own name and thereafter they have sold goods to ZIL. In these circumstances, whatever expenses have been incurred before transfer of the goods, form part of the sale price of the impugned goods. In these circumstances, relying on the decision of Nahar Industrial Enterprises (2010 (1) TMI 400 - PUNJAB & HARYANA HIGH COURT) we are of the view that the appellant is paying these charges for their own purposes. Therefore, same cannot form part of the service tax liability under Section 65(19) clause (4) of the Finance Act, 1994 i.e. Business Auxiliary Service. - Decided in favour of assesse.

Summary

Issues:
- Appeal against demand of service tax, interest, and penalties under Business Auxiliary Service category
- Application for extension of Stay

Analysis:
1. Demand of Service Tax, Interest, and Penalties:
The appellant appealed against the impugned order demanding service tax, interest, and penalties under the Business Auxiliary Service category. The case involved an agreement with M/s. Zuari Industries Ltd. for the sale of goods on a high seas sale basis. The revenue contended that additional handling charges and facilitation charges were leviable to service tax. The appellant argued that they were not a service provider but selling goods on a principal-to-principal basis. They imported goods in their own name and account, thus not engaged in procurement for ZIL. The appellant relied on a previous case to support their argument that charges paid by them were for their own purposes and not part of service tax liability. The tribunal agreed with the appellant, stating that expenses incurred before the transfer of goods formed part of the sale price, and charges paid were for the appellant's own purposes, not subject to service tax under the Finance Act, 1994.

2. Application for Extension of Stay:
The appellant also filed an application for an extension of Stay, which was disposed of as the appeal itself was taken up for final disposal. The tribunal set aside the impugned order, allowing the appeal with any consequential relief. The judgment concluded by disposing of the application for an extension of stay, providing relief to the appellant in the case.