2015 (8) TMI 744 - AT - Service Tax

Business Auxiliary Service - Section 65 (19) of the Finance Act, 1994 - assistance to clients in payment of octroi and complying with the provisions of BMC Act - Held that - Mere reading of the invoices and the challans by the appellant, (the octroi agent) for the purpose of filling up the form and obtaining clearance at the check post, does not amounts to dealing with or handling the documents of title. One can in the normal commercial term dealing with the title is possible when a person having authority to transfer the title of such documents. Wherein in the present case it is an admitted fact that the appellant does not have any authority to transfer the title and as such, the mere reading of the documents for the purpose of clearance of octroi does not amounts to dealing with or the handling of documents of title of the goods. Thus, we hold that the learned Commissioner has erred in holding that the appellants have handled or are handling the documents of title - Decided in favour of assessee.

Summary

Issues:
1. Classification of services provided by an octroi clearing agent under the category of "Business Auxiliary Service" for the purpose of service tax liability.

Analysis:
The appellant, an octroi clearing agent, appealed against an Order-in-Appeal passed by the Commissioner of Central Excise & Customs, Mumbai, holding them liable to pay service tax under the classification of "Business Auxiliary Service" for the clearing services of Octroi provided to their clients. The appellant's services involved facilitating payment of Octroi, depositing the amount on behalf of clients, and obtaining clearance under the Octroi act. The Revenue contended that these services fell under the definition of Business Auxiliary Service under Section 65 (19) of the Finance Act. The appellant contested the show-cause notice, arguing that they did not fall under the specified categories and their services were similar to those provided by Customs House Agents. The lower authorities confirmed the demands, holding that the appellant's activities involved handling documents of title for obtaining octroi clearance, which constituted dealing with goods or services under the definition of "Commission Agent." Penalties were imposed, which were later reduced. The appellant appealed to the Commissioner (Appeals), who upheld the findings of the lower authorities.

The appellant further contended that their actions did not amount to handling documents of title, as they only read the documents for octroi assessment and clearance without authority to transfer title. The appellant referenced a decision by the Tribunal regarding the specificity required in show-cause notices for tax liability. The Revenue argued that the appellant acted as an octroi agent, paying tax on behalf of clients and receiving reimbursement along with service charges. They relied on the Commissioner (Appeals) findings on the interpretation of "deal with." The Tribunal considered the submissions and held that merely reading invoices and challans for octroi clearance did not constitute dealing with or handling documents of title, as the appellant lacked authority to transfer title. The Tribunal concluded that the Commissioner erred in determining that the appellant handled documents of title, allowing the appeal and setting aside the impugned order.

In conclusion, the Tribunal's decision clarified that the appellant's actions as an octroi clearing agent did not fall under the classification of "Business Auxiliary Service" for service tax liability, as they did not have the authority to transfer title and were not handling documents of title. The appeal was allowed with consequential benefits, if any, and the impugned order was set aside.