2009 (2) TMI 204 - AT - Service Tax

Business Auxiliary Service Call Centre Service Notification no. 8/2003 - The appellants have shown that they had rendered a call centre services to State Electricity Board. Learned advocate invited our attention to the said notification which grants exemption to services rendered by Call Centre or Medical Transcription Centre in terms of Notification 8/2003-S.T. dated 20-6-2003. The said notification has been amended by Notification No. 12/2004-S.T. dated 10-9-2004 wherein the scope of call centre has been expanded. It was argued that the activities carried out by the appellant would indeed fall within the ambit of call centre as defined in the said notification recovery stayed

Summary

Issues:
1. Pre-deposit requirements under Service Tax for a specific period.
2. Interpretation of Notification No. 8/2003-S.T. and subsequent amendments.
3. Classification of services as Business Auxiliary Services.
4. Clarity and adequacy of the adjudication order.

Analysis:
1. The appellants were directed to pre-deposit various amounts, including Service Tax, Education Cess, interest, and penalties under different sections of the Finance Act, 1994, for the period from 1-7-2003 to 30-9-2006. The appellants, engaged in Call Centre services, claimed entitlement to the benefit of Notification No. 8/2003-S.T. until 1-3-2006. Despite delays in registration and investigations by the Revenue, the Adjudicating Authority confirmed the demand based on the classification of services as Business Auxiliary Services rather than as per the exemption notification.

2. The adjudication order lacked clarity regarding the nature of services provided by the appellants. The appellants argued that their activities fell within the scope of Call Centre services as defined in Notification No. 8/2003-S.T. and subsequent amendments, supported by a Board's clarification dated 10-5-2007. They highlighted their service to the State Electricity Board as an example. The Tribunal acknowledged the ambiguity in the adjudication order and leaned towards granting a waiver of the balance amount demanded due to the appellants' partial payment and the potential applicability of the exemption notification.

3. The dispute arose from the Revenue's contention that the appellants' services exceeded mere call centre activities, falling under the category of Business Auxiliary Services. Despite the show cause notice recognizing the entitlement to exemption until 1-3-2006, the Adjudicating Authority proceeded with the demand under a different classification. The appellants' arguments emphasized the alignment of their services with the definitions and amendments in the relevant notifications, indicating a clear discrepancy in the adjudication process.

4. In light of the arguments presented, the Tribunal found the adjudication order to be unclear and lacking in specificity regarding the applicability of the exemption notification and the classification of services. The Tribunal considered the appellants' contentions, including documentary evidence and legal provisions, leading to a decision to potentially waive the pre-deposit requirement pending further hearings. The matter was scheduled for a subsequent hearing to address the unresolved issues and provide a final determination on the disputed demands.