2023 (9) TMI 1438 - AT - Service Tax

Levy of service tax - Business Support service or not - whether appellant has not received any amount towards marketing agency agreement? - HELD THAT - During the course of hearing of the Stay Petition by this Tribunal, a report was sought from the Commissioner, Jamshedpur to the effect that whether the appellant has received any amount towards marketing and consignment agency services and the said report has been submitted by the ld.Commissioner. It is evident from the records and the reports submitted by the ld.Commissioner, Jamshedpur that the appellant has not received any amount towards marketing agency agreement, therefore, the question of demanding service tax does not arise. There are no merit in the impugned order and the same is set aside - appeal allowed.

Summary

Issues involved:
Appeal against demand of service tax under the category of "support of services of business and commerce" confirmed.

Details of the judgment:

Issue 1: Service Tax Demand
The appellant, engaged in manufacturing and sale of excisable goods, entered into agreements with Tata Steel Limited for conversion and handling of materials. The Revenue alleged that the appellant provided services under the category of "support of services of business and commerce" and initiated proceedings for demanding service tax. The demand was confirmed in the adjudication.

Issue 2: Appellant's Submission
The appellant argued that they were engaged by Tata Steel Ltd. for conversion of raw materials on a job work basis. They cleared goods manufactured on payment of excise duty. The Revenue alleged non-payment of service tax under the category of "Business Support Service" as the appellant handled goods as a "Marketing and Consignment Agent." The appellant contended that they did not receive any amount except conversion and freight charges, and therefore, were not liable to pay service tax.

Issue 3: Verification by Department
The Commissioner of Central Excise, Jamshedpur confirmed that the appellant did not receive any amount towards marketing agency agreement. Based on this verification, the Tribunal found that the appellant was not liable to pay service tax as alleged.

In conclusion, the Tribunal set aside the impugned order as the appellant did not receive any amount towards the marketing agency agreement, thereby ruling in favor of the appellant and allowing the appeal with consequential relief.