2016 (10) TMI 654 - AT - Service Tax

Refund claim of service tax paid - classification of services - Business Support Service or Business Auxiliary Service - whether the appellant justified in claiming refund of tax paid under the head Business Support Service as now he believes the service to be classified under the head Business Auxiliary Service ? - the decision in the case of Pagariya Auto Centre Vs. Commissioner of Central Excise, Aurangabad 2014 (2) TMI 98 - CESTAT NEW DELHI (LB) relied upon - Held that - appellant himself has classified the services, discharged tax on the commission received from financial institution under the category of Business Support Service . The issue is no more res integra the tax liability arises on these services under Business Auxiliary Service as per Larger Bench decision, appellants classification of services as per his knowledge, under a category cannot be held to be as misunderstanding of law as the tax liability arised on the commission, cannot be disputed. Claiming a refund of the amount paid as tax as per their understanding of law cannot be disputed now - refund claim rejected - appeal dismissed - decided against appellant.

Summary

Issues involved:
Classification of Service Tax liability under "Business Support Service" or "Business Auxiliary Service" for the period from June 2006 to March 2008.

Analysis:

1. Classification of Service Tax liability:
The issue in this case revolves around the classification of Service Tax liability under either "Business Support Service" or "Business Auxiliary Service" for the period between June 2006 to March 2008. The lower authority had issued a show-cause notice demanding Service Tax under the category of "Business Auxiliary Service" for the commission paid by various financial institutions. The appellant, however, had initially discharged Service Tax under "Business Support Service" and subsequently filed a refund claim upon receiving the show-cause notice. The lower authorities rejected the refund claim, stating that the Service Tax demand under "Business Support Service" was correct. The Tribunal observed that during the material period, the appellant themselves classified the service and discharged Service Tax under "Business Support Service." However, upon realizing that the tax liability on the commission received should be classified under "Business Auxiliary Service," as per a Tribunal judgment in a similar case, the appellant filed a refund claim. The Tribunal held that the appellant's classification of services under a specific category cannot be considered a misunderstanding of the law, and the tax liability on the commission cannot be disputed. Therefore, the Tribunal rejected the appeals filed by the appellant, stating that the tax liability arises under "Business Auxiliary Service," and the refund claim based on the appellant's understanding of the law is valid.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision regarding the classification of Service Tax liability under "Business Support Service" or "Business Auxiliary Service" for the specified period.