2017 (9) TMI 553 - AT - Service Tax

Business Auxiliary Services - the appellant/assessee had entered into an agreement with BSNL company to provide printing services of the telephone bills in their premises - whether Business Auxiliary Services or not? - Held that - the identical issue has come up before the Tribunal in the assessee s own case CCE, Delhi Versus M/s Ricoh India Limited And Vice-Versa 2017 (3) TMI 1159 - CESTAT NEW DELHI , where it was held that the appellant/assessee is not responsible for any details in the bill or authenticity of the same. They are simply printings in a preformatted design the telephone bills based on the data provided by the telecom company and give the printed bills in envelops, after bunching in convenient groups, for further follow up by the telecom companies, such activity cannot be considered as business auxiliary service - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the printing services provided by the appellant to a telecom company fall under the category of business auxiliary service as per Section 65(19) of the Finance Act, 1994?

Analysis:
The appellant had entered into an agreement with a telecom company to provide printing services of telephone bills in their premises. The department considered this service as falling under business auxiliary service under Section 65(19) of the Finance Act, 1994. The Tribunal analyzed the statutory definition of business auxiliary service, particularly sub-clause (vii), which includes services incidental or auxiliary to specified activities, such as billing. The Tribunal noted that the appellant was essentially involved in printing telephone bills and post-printing operations like dispatching bills, but not in quantifying charges or ensuring bill accuracy. The Tribunal concluded that the appellant's activities did not qualify as business auxiliary service, as they were not responsible for bill details or authenticity. The appellant's role was limited to printing bills based on data provided by the telecom company and preparing them for further dispatch. The Tribunal emphasized that billing involves financial activities like quantifying charges and ensuring bill accuracy, which the appellant was not involved in. Therefore, the Tribunal held that the printing services provided did not constitute business auxiliary service.

2. Whether the Tribunal's previous decision in a similar case supported the appellant's contention regarding the nature of the service provided?

Analysis:
The Tribunal referred to its earlier decision in the appellant's own case for a different period, where relief was granted based on similar grounds. The Tribunal highlighted that the appellant's activities did not involve promoting or marketing services on behalf of the telecom companies, as required under the definition of business auxiliary service. The Tribunal also considered a final order passed in another case, which stated that printing and delivering bills to the client did not qualify as business auxiliary service. By aligning with its previous decisions and considering the nature of the appellant's activities, the Tribunal found no reason to uphold the department's classification of the service as business auxiliary. Consequently, the Tribunal set aside the impugned order and allowed the appeal filed by the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the printing services provided to the telecom company did not constitute business auxiliary service as defined under the Finance Act, 1994. The Tribunal emphasized that the appellant's role was limited to printing bills based on provided data and preparing them for dispatch, without involvement in financial aspects or customer interactions related to billing. By considering its previous decisions and the specific nature of the appellant's activities, the Tribunal concluded that the service provided did not fall under the ambit of business auxiliary service, leading to the allowance of the appeal.