2008 (6) TMI 80 - AT - Service Tax

Respondents are owner of Dharamkanta and they are undertaking the weighment of the goods - we find the Business Auxiliary Service means any service in relation to promotion/marketing/sale of goods, produced or provided by or belonging to clients. As respondents are not concerned with the sale or marketing of the goods, therefore, can not be said to be provider incidental or auxiliary service to any activity such as promotion or marketing or sale of goods produced demand was rightly set aside

Summary

Issues:
Appeal against demand of service tax for Business Auxiliary Service under Section 65(19) of Finance Act.

Analysis:
The case involved multiple service tax appeals against orders setting aside the demand for service tax on the grounds that the respondents were not providing Business Auxiliary Service as defined under Section 65(19) of the Finance Act. The revenue contended that weighment of goods is essential for their sale, and as the respondents were managing Dharamkanta and issuing weighment slips, they were providing a service incidental to the marketing or sale of goods. However, the Commissioner (Appeals) held that the respondents were not involved in the promotion, marketing, or sale of goods, as they were only responsible for weighment and had no interest in the nature or purpose of the goods being weighed.

The key issue was whether the respondents, as owners of Dharamkanta, were providing Business Auxiliary Service by undertaking the weighment of goods. The Tribunal noted that Business Auxiliary Service includes services related to promotion, marketing, or sale of goods produced by clients. Since the respondents were not engaged in the sale or marketing of goods, they could not be considered as providing incidental or auxiliary services in relation to such activities. Therefore, the Tribunal found no merit in the revenue's argument and dismissed the appeals, upholding the impugned orders.

In conclusion, the Tribunal clarified that the respondents' role in weighment services did not qualify as Business Auxiliary Service under the Finance Act, as they were not involved in the promotion, marketing, or sale of goods. The decision highlighted the distinction between essential services like weighment and activities directly related to the marketing or sale of goods, emphasizing that incidental or auxiliary services must be connected to promotional or marketing activities to fall under the category of Business Auxiliary Service.