2008 (6) TMI 82 - AT - Service Tax

Case of the appellant is that the appellant being proprietary firm is not covered by the definition of business auxiliary service as the appellants are not a commercial concern, therefore, are not liable to pay Service Tax - issue is already settled in favour of the Revenue by the Tribunal in CCE Vs. R.S. Financial Services no valid reason to hold that, a sole-proprietary concern was not a commercial proprietary concern assessee s contention is not acceptable hence appeal is dismissed

Summary

Issues:
1. Interpretation of the definition of business auxiliary service for service tax liability of a proprietary firm.

Analysis:
The appellant, a proprietary firm, challenged the rejection of their claim by the Commissioner (Appeals) regarding the liability to pay Service Tax as a business auxiliary service provider. The main contention was that as a proprietary firm, they were not a commercial concern and thus not liable to pay the tax. However, the Tribunal referred to a previous decision in the case of CCE Vs. R.S. Financial Services, where it was established that a sole-proprietor's business falls under the definition of a commercial concern. The Tribunal clarified that the term "concern" in the context of a sole proprietor's business refers to the business itself, and therefore, a proprietary concern is indeed a commercial entity. The Tribunal emphasized that the nature of activity in providing Business Auxiliary Services remains the same regardless of the type of concern providing the service. Consequently, the Tribunal found no merit in the appellant's appeals and dismissed them based on the precedent set by the earlier decision.

In conclusion, the judgment reaffirms that a proprietary concern, such as a sole proprietorship, is considered a commercial entity for the purpose of Service Tax liability under the definition of business auxiliary service. The Tribunal's decision was based on the interpretation that the term "concern" refers to the business itself, irrespective of its legal structure. The ruling clarifies that the nature of the service provided is the determining factor for tax liability, rather than the specific type of business entity offering the service.