2018 (3) TMI 1059 - AT - Service Tax

Business Auxiliary services - appellant contends that despite depositing the tax amount during investigation they challenge the taxability as they do not provide any taxable service - Held that - the Port Trust has engaged the services of the appellant and that appellant is in receipt of consideration from the Port Trust. In these circumstances, the existence of third party in transaction, which is a necessary element for coverage u/s 65 (105) (zzb) read with section 65(19) of Finance Act, 1994, is questionable - Tribunal in Golden Handling Works 2017 (12) TMI 165 - CESTAT NEW DELHI is categorical in requiring the assessing authority to determine the specific characteristic of the service which is a necessary pre-requisite for fastening liability - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Tax liability of the appellant under 'business auxiliary services' taxable under section 65(105) (zzb) of Finance Act, 1994.
2. Challenge to taxability by the appellant despite depositing the tax amount during investigation.
3. Determination of specific characteristic of service for fastening liability.
4. Existence of a third party in the transaction as a necessary element for coverage under section 65(105) (zzb) read with section 65(19) of Finance Act, 1994.

Analysis:

1. The appellant, M/s. Elephants Lashing, appealed against an order confirming a tax liability of &8377; 7,21,116/-, along with interest and penalties under section 76 and 78 of Finance Act, 1994. The issue revolved around whether the appellant provided 'business auxiliary services' to M/s Jawaharlal Nehru Port Trust, falling under section 65(105) (zzb) of the Finance Act, 1994.

2. The appellant contended that despite depositing the tax amount during investigation, they disputed the taxability as they believed they did not offer any taxable service. The appellant argued that the lower authorities failed to isolate the relevant aspect of 'business auxiliary service' applicable to them from the various activities enumerated in section 65(19) of the Finance Act, 1994. The appellant relied on a Tribunal decision highlighting the importance of correctly identifying the taxable activities.

3. The Authorized Representative for the appellant argued that the services provided were crucial for the safety of vessels and cargo, justifying the classification of the activity as 'business auxiliary service.' However, the Tribunal emphasized the necessity for the assessing authority to determine the specific characteristic of the service to establish liability accurately.

4. The Tribunal noted that the appellant had engaged with the Port Trust and received consideration for services rendered. However, the Tribunal questioned the presence of a third party in the transaction, which is a crucial element for coverage under section 65(105) (zzb) read with section 65(19) of the Finance Act, 1994. Based on this analysis, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the importance of correctly identifying the taxable service elements for liability determination.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the Tribunal's decision in this case.