2016 (6) TMI 624 - AT - Service Tax

Business Auxiliary Services - commission received towards disbursement of salary of Government teachers - Held that - the very same issue in the appellant s own case is reported as Janata Sahakari Bank Ltd. Vs. Commissioner of Central Excise, Pune-III - 2015 (5) TMI 635 - CESTAT MUMBAI , this Tribunal has held that commission received by the appellant from the Government of Maharashtra for disbursement of government teachers salary, cannot be charged to Service Tax. - Demand set aside - Decided in favor of assessee.

Summary

Issues:
- Appeal against Order-in-Appeal rejecting appeal filed by the appellant.
- Classification of commission received for disbursement of salary of Government teachers under "Business Auxiliary Services."
- Interpretation of the definition of commission agent as per the Finance Act, 2005.

Analysis:
The judgment involves an appeal against Order-in-Appeal No. P-III/RS/111/2012, where the Commissioner of Central Excise (Appeals-III), Pune, upheld the Order-in-Original rejecting the appellant's appeal. The case revolves around the classification of commission received by the appellant for disbursement of salary of Government teachers under "Business Auxiliary Services." The department contended that the commission falls under this provision, leading to a demand for Service Tax. However, the Tribunal referred to a previous decision in the appellant's own case where it was held that such commission cannot be charged to Service Tax. The Tribunal analyzed the definition of a commission agent as per the Finance Act, 2005, emphasizing that the appellant's activities did not align with the criteria outlined in the definition.

The Tribunal highlighted that the appellant did not undertake activities specified for a commission agent as per the Act, such as dealing with goods or services, collecting payment, guaranteeing collection or payment, or undertaking activities related to sale or purchase. The Tribunal concluded that the amount received for disbursement of salaries to Government teachers could not be considered a Business Auxiliary Service or commission received by the appellant. Relying on the precedent set in the appellant's previous case and the interpretation of the definition of a commission agent, the Tribunal allowed the appeal with consequential relief. The judgment clarifies the legal position regarding the classification of such commissions and provides a detailed analysis based on the statutory definition and relevant case law.

In conclusion, the judgment serves as a significant precedent in clarifying the scope of Business Auxiliary Services and the definition of a commission agent under the Finance Act, 2005. It underscores the importance of aligning activities with statutory definitions and previous legal interpretations to determine the tax liability on specific transactions. The detailed analysis provided by the Tribunal ensures a thorough understanding of the legal reasoning behind the decision, offering guidance for similar cases in the future.