2015 (7) TMI 886 - HC - Service Tax

Business Auxiliary service - service being rendered by the assessee for the Transport Department under the Motor Vehicle Act - service rendered to public authorities - Held that - Work done by the respondent assessee pertains to discharge of statutory function by the Department under the Motor Vehicle Act and the same does not amount to customer care, promotion, marketing of services, incidental or auxillary to the support services - In the case of Commissioner of Central Excise, Indore Vs. Ankit Consultancy Limited, 2006 (10) TMI 61 - CESTAT, NEW DELHI , the Tribunal under similar circumstances has held that service rendered for preparation of voter identity card is not a business auxillary service coming within the purview of section 69(19) of the Finance Act, 1994. - definition of business auxillary service , as is defined under section 65(19) and on evaluating the same in the backdrop of the service being rendered by the assessee for the Transport Department under the Motor Vehicle Act, we find no error in the order passed by the Tribunal warranting reconsideration nor does any substantial question of law arises for consideration in this matter - Decided against Revenue.

Summary

Issues:
- Tenability of the order passed by the Customs Excise and Service Tax Appellate Tribunal regarding the liability for service tax on activities carried out under a contract with the State of Madhya Pradesh.
- Determination of whether the activities performed by the respondent assessee fall under the category of 'business auxiliary service' as per the provisions of the Finance Act, 1994.
- Interpretation of the definition of 'business auxiliary service' under section 65(19) of the Finance Act, 1994 in the context of the services rendered by the assessee to the Transport Department under the Motor Vehicle Act.

Analysis:
The High Court examined the appeal challenging the order dated 2.12.2011 passed by the Customs Excise and Service Tax Appellate Tribunal. The Tribunal had ruled that the activities carried out by the respondent assessee under a contract with the State of Madhya Pradesh, specifically establishing service centers in different offices of the Transport Department, did not amount to 'business auxiliary service' liable for service tax. The Tribunal referenced a Delhi High Court decision and a circular from the Ministry of Finance to support its conclusion. The High Court noted that the work done by the assessee was related to the discharge of statutory functions under the Motor Vehicle Act and did not constitute activities like customer care, promotion, or marketing of services that are incidental to support services.

In a similar case involving the preparation of voter identity cards, the Tribunal had previously held that such services did not qualify as 'business auxiliary service' under the Finance Act, 1994. The respondent's counsel presented an order from the Central Excise Tribunal in another case to support this argument. The High Court analyzed the definition of 'business auxiliary service' under section 65(19) of the Finance Act, 1994 and concluded that the services provided by the assessee to the Transport Department did not meet the criteria for being classified as 'business auxiliary service'. Therefore, the High Court found no error in the Tribunal's decision and dismissed the appeal, stating that no substantial question of law arose for consideration in this matter.

Overall, the judgment focused on interpreting the scope of 'business auxiliary service' under the relevant legal provisions and applying it to the specific services rendered by the respondent assessee to determine the liability for service tax. The High Court's decision was based on a thorough analysis of the facts, legal definitions, and precedents, ultimately upholding the Tribunal's ruling in favor of the respondent.