2016 (12) TMI 398 - AT - Service Tax

Commercial concern - business auxiliary services - During adjudication the original adjudicating authority took a view that as the appellant was providing such services to M/s. Amar Products as an individual and not under the name of any commercial concern he would not be covered by the definition of Business Auxiliary Services as appearing in section 55 (105)(zzb) of the Finance Act 1994 - Held that - the appellant in his individual capacity has provided services to M/s. Amar Products and was not having any commercial concern for undertaking the business in regular course. As such we find no infirmity in the views adopted by Commissioner (A) or the original adjudicating authority which is based upon boards circular and the precedent decisions. Time bar - Held that - during the relevant period there was a lot of confusion. All the activities undertaken by the appellant were a part of the reflection made in the balance sheet and income tax return in which case no suppression or malafide can be attributed to the assessee. Revenue has not been able to produce any evidence on record to show that the tax, which according to the revenue was payable, was not being paid on account of any malafide. As such we agree with the lower authorities that the extended period would not be available to the Revenue. Appeal rejected - decided against appellant-Revenue.

Summary

Issues:
1. Interpretation of the definition of Business Auxiliary Services under the Finance Act, 1994.
2. Applicability of service tax on services provided by individuals without a commercial concern.
3. Invocation of the extended period under section 73 of the Act.
4. Consideration of CBEC circulars and judgments in determining tax liability.

Analysis:
1. The case involved a dispute regarding the provision of business auxiliary services by an individual to M/s. Amar Products on a commission basis. The original adjudicating authority held that since the services were provided as an individual and not under a commercial concern, the individual was not covered by the definition of Business Auxiliary Services as per the Finance Act, 1994 before 01.05.2006. The authority also ruled in favor of the assessee on the issue of time bar, dropping the proceedings under the show cause notice.

2. The Revenue appealed this decision before the Commissioner (A), arguing that the individual had indeed provided business auxiliary services. However, the appellate authority, considering various CBEC circulars and judgments, upheld the original decision. It was noted that services performed by individuals without a proper commercial establishment were not chargeable to service tax before 01.05.2006. The Commissioner (A) emphasized that the individual, in this case, had provided services without a commercial concern and, therefore, could not be taxed under Business Auxiliary Services.

3. Regarding the invocation of the extended period under section 73 of the Act, the Commissioner (A) found that it was not applicable as the respondent had a genuine belief that the services were not taxable based on CBEC circulars and tribunal judgments. The Commissioner held that where issues involve the interpretation of legal provisions and information is disclosed in statutory documents, the extended period cannot be invoked.

4. The Tribunal, after considering the arguments from both sides, affirmed the decisions of the lower authorities. It noted that the appellant had provided services in an individual capacity without a commercial concern, in line with the CBEC circulars. The Tribunal also agreed with the lower authorities on the issue of time bar, stating that there was no evidence of malafide intentions or suppression by the assessee. Consequently, the Tribunal rejected the Revenue's appeal, citing the application of CBEC circulars and precedent decisions in determining the tax liability.

In conclusion, the Tribunal upheld the decisions of the lower authorities based on the interpretation of the definition of Business Auxiliary Services, the applicability of service tax to individuals without a commercial concern, and the non-invocation of the extended period under section 73 of the Act, while considering CBEC circulars and judgments in determining the tax liability.