2015 (11) TMI 613 - AT - Service Tax

Demand of service tax - individual jewellery appraiser - Technical Testing and Certification Service - Held that - On perusal of the SCN and the adjudication order and impugned order, we find that the adjudicating authority has dropped the proceedings on the ground that certifying purity and value of the gold for pledging in the bank does not require any technical knowledge and technical instrument. The appellant is an individual jewellery appraiser and receives commission from the bank which is clearly recorded in both the SCN and in the adjudication order. The amount received is paid by the bank as commission and not testing charges or certification charges. Prima facie, we find that service rendered by the appellant is not Technical Testing and Certification Service . We find that the adjudicating authority has rightly held that examination of gold ornaments which is brought to the bank for pledging is for testing the purity and value of the gold. Hence, the amount received by the appellant as commission cannot be classifiable under Technical Testing and Certification Service and not liable for demand of service tax - Decided in favour of assessee.

Summary

Issues:
Demand of service tax under Technical Testing and Certification Service

Analysis:
The case involved a petitioner who filed a stay petition against an order for waiver of pre-deposit of service tax along with interest and penalty. The petitioner, a jewellery appraiser certifying the purity and value of gold ornaments for pledging, received commission from the bank. A show cause notice was issued for demand of service tax under Technical Testing and Certification Service. The adjudicating authority initially dropped the proceedings, stating that certifying the purity and value of gold did not require technical knowledge or instruments. However, the Commissioner (Appeals) set aside this decision and confirmed the demand of service tax along with interest and penalty. The central issue revolved around whether the service provided by the petitioner fell under Technical Testing and Certification Service.

Upon review of the case, the Tribunal found that the service rendered by the petitioner, certifying the purity and value of gold ornaments for pledging in the bank, did not qualify as Technical Testing and Certification Service. The appellant, as an individual jewellery appraiser, received commission from the bank, not testing or certification charges. The Tribunal noted that the adjudicating authority correctly identified that the examination of gold ornaments for pledging was for testing the purity and value of gold, rather than technical testing and certification. Consequently, the amount received by the appellant as commission was not classifiable under Technical Testing and Certification Service, leading to the setting aside of the impugned order and allowing the appeal.

In conclusion, the Tribunal's decision rested on the distinction between the nature of the service provided by the petitioner, focusing on the purpose of certifying the purity and value of gold ornaments for pledging rather than technical testing and certification. By analyzing the facts and legal provisions, the Tribunal determined that the service did not fall under the category of Technical Testing and Certification Service, resulting in the appeal being allowed and the impugned order set aside.