2017 (10) TMI 26 - AT - Service Tax

Classification of services - Business Auxiliary Services or Business Support Services? - services of maintenance of accounts and spot billing employing computerized data processing to Andhra Pradesh Central Power Distribution Company (APCDCL) - Held that - the issue is no more resintegra as Division Bench of the Tribunal in the case of Phoenix IT Solutions 2011 (1) TMI 642 - CESTAT, BANGALORE had analysed the very same services rendered by the appellant therein and came to a conclusion that the services would not fall under the category of business auxiliary services - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of services under business auxiliary services (BAS) or business support services.

Analysis:
The appeals were against the orders dated 17.01.2008 and 17.11.2006. The issue revolved around the services provided by the appellants to APCDCL from July 2003 to September 2005 for maintenance of accounts and spot billing. The Revenue contended that these services fell under BAS or business support services. The adjudicating authority confirmed the demands raised, which were upheld by the 1st Appellate Authority. The appellant argued that the services fell under business support services post-1.5.2006 and relied on a Tribunal decision. The Revenue cited a similar case where the Tribunal classified a similar activity as taxable under BAS. The Tribunal noted that the appellant was engaged in maintenance of accounts and spot billing for APCDCL under a contract. The issue was whether these services should be classified as business auxiliary services, which the Revenue asserted, or business support services, as claimed by the appellant.

The Tribunal referred to a previous decision in the case of Phoenix IT Solutions, where similar services were analyzed, and it was concluded that they did not fall under business auxiliary services. The Revenue appealed to the High Court, which upheld the Tribunal's decision, stating that the services were correctly classifiable under Support Service of Business or Commerce (SSBC) and not BAS. The High Court's judgment was not appealed further. The Tribunal distinguished a later decision cited by the Revenue, stating that the High Court's judgment was not considered in that case. The Tribunal emphasized that a judgment from a higher judicial forum takes precedence over a coordinate bench's decision. Consequently, the impugned orders were set aside, and the appeals were allowed.

In conclusion, the judgment clarified the classification of services provided by the appellants, determining that they should be categorized under business support services rather than business auxiliary services, based on the interpretation of relevant legal provisions and precedents.