2015 (12) TMI 269 - AT - Service Tax

Business auxiliary services - benefit of Notification No. 6/2005-S.T., dated 1-3-2005 - SSI Exemption - Held that - Respondents are entitled for the benefit under Notification No. 6/2005, as they are not providing services to the independent person under the brand name of some other person. In fact, in this case, the respondent is providing services to the brand name owner (i.e. the service recipient). Therefore, we hold that respondents are entitled for benefit of exemption under Notification No. 6/2005. In these circumstances, we do not find any infirmity in the impugned order, same is upheld. - Decided against Revenue.

Summary

Issues:
- Classification of services under Business Auxiliary services
- Entitlement to exemption under Notification No. 6/2005-S.T.

Classification of services under Business Auxiliary services:
The appeal involved a dispute regarding the classification of services provided by the respondent under the category of Business Auxiliary services. The Revenue contended that the activities undertaken by the respondent fell under Business Auxiliary services as defined under Section 65(19) of the Finance Act, 1994. The Revenue argued that the respondent's identification of prospective clients for loans from LIC Housing Finance Co. and subsequent submission of applications constituted services falling under Business Auxiliary services, making the respondent liable to pay Service Tax.

Entitlement to exemption under Notification No. 6/2005-S.T.:
The key issue in the appeal was the respondent's entitlement to the benefit of exemption under Notification No. 6/2005-S.T. The Revenue claimed that since the respondent was using the brand name of LIC Housing Finance while providing services, they were not eligible for the exemption. However, the Tribunal found that the respondent was providing services to the brand name owner, i.e., the service recipient, and not to an independent person under another brand name. Consequently, the Tribunal held that the respondent was entitled to the benefit of exemption under Notification No. 6/2005.

The Tribunal, after hearing both parties and considering the submissions, refrained from delving into the classification of services. Instead, the Tribunal focused on the crucial aspect of the respondent's entitlement to the exemption under Notification No. 6/2005. The Tribunal concluded that since the respondent was providing services to the brand name owner, they qualified for the exemption. Consequently, the impugned order dropping the demand of Service Tax against the respondent was upheld, and the appeal by the Revenue was dismissed. The Tribunal also disposed of the Cross Objection filed in the matter.

In summary, the judgment clarified that the respondent's services were not classified as Business Auxiliary services and that they were entitled to the benefit of exemption under Notification No. 6/2005 as they were providing services to the brand name owner. The decision emphasized the importance of the specific nature of the services provided in determining eligibility for tax exemptions under relevant notifications.