2008 (5) TMI 272 - AT - Service Tax

Claim for exemption under Notification No. 13/2003-S.T. dated 20-6-2003 which exempted commission agent who causes sale or purchase of goods and not services - appellant had provided services of networking marketing sales and distribution of services of M/s. Tata Teleservices Ltd. and had earned commission - appellants had caused sale of services and not of goods and hence not covered under the definition of commission agent for the purpose of availing exemption under Notification No. 13/2003 - appellant is eligible for the benefits of the Amnesty Scheme and therefore no penalty is imposable appeal is allowed in part

Summary

Issues:
1. Claim for exemption under Notification No. 13/2003-S.T.
2. Claim for waiver of penalty under Circular No. 137/39/2004-CX.4

Claim for Exemption under Notification No. 13/2003-S.T.:
The appellants provided 'business auxiliary service' to a company and contended that they were exempt from service tax under Notification No. 13/2003-S.T. The Commissioner (Appeals) found that the services provided fell under the category of business auxiliary service and were chargeable to service tax. The appellants argued that they acted as commission agents and were exempt from service tax during a specific period. However, it was established that the exemption applied to commission agents dealing with goods, not services. The appellants' services involved networking, marketing, sales, and distribution of services, not goods, making them ineligible for the exemption. The Commissioner's decision to confirm the demand and interest was upheld.

Claim for Waiver of Penalty under Circular No. 137/39/2004-CX.4:
The appellants sought a waiver of penalties under an Amnesty Scheme declared by the Government. The Commissioner (Appeals) initially rejected the claim, citing that the appellants obtained service tax registration before the scheme's implementation. However, the Tribunal held that the appellants were eligible for the Amnesty Scheme benefits based on relevant case laws. Consequently, no penalty was imposed on the appellants under Sections 76, 77, and 78 of the Finance Act, 1994. The Tribunal ruled in favor of the appellants concerning the penalties imposed.

In conclusion, the Tribunal upheld the decision regarding the service tax liability under Notification No. 13/2003-S.T. and granted relief to the appellants by waiving the penalties as per the Amnesty Scheme. The judgment was pronounced on 8-5-2008 by Member (T) Shri B.S.V. Murthy.