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2018 (8) TMI 700 - AT - Service TaxClassification of services - assessee herein has a contract with M/s Ushodaya Enterprises Ltd., under which they collected newspaper bundled and distributed them to various agents for a consideration - whether to be classified under Business Auxiliary Service or under Clearing and Forwarding services - Held that - As observed by the First Appellate Authority in his Order No. 10/2009 dated 26.02.2009 at the time show cause notice was issued, the Department itself is not sure under which head the appellant is liable for service tax. For this reason, we find that these appeals need to be decided in favour of the assessee. Before issuance of show cause notice, the Department could have collected necessary information and come to a conclusion, as to the classification of services rendered and issued a more specific show cause notice which would have been sustainable. Appeal dismissed - decided against Revenue.
Issues:
1. Revision of an Order-in-Revision challenged by the assessee. 2. Classification of services provided by the assessee under different categories. 3. Disagreement on the classification of services between the assessee and the Department. 4. Applicability of Business Auxiliary Services to the activities of the assessee. Issue 1: Revision of an Order-in-Revision The appeal was filed against an Order-in-Revision issued by the Commissioner under Section 84 of the Finance Act, 1994, revising a previous Order-in-Original. The appellant argued that the revision should be set aside as an Order-in-Appeal had already been issued before the Order-in-Revision. The Tribunal agreed with this contention and set aside the Order-in-Revision. Issue 2: Classification of services The appeals dealt with the classification of services provided by the assessee to M/s Ushodaya Enterprises Ltd. The Department had proposed various classifications like Business Auxiliary Services, Clearing and Forwarding services, and Cargo Handling services. The lower authorities had classified the services differently for different periods. The Tribunal noted the ambiguity in the show cause notices and the Department's inconsistent classifications, leading to confusion regarding the taxable services rendered. Issue 3: Disagreement on classification The assessee contended that the services involved only tying together of newspaper bundles and transporting them, which should not be classified as Business Auxiliary Services. The Department argued that the activities performed by the assessee, as per the agreement, encompassed a broader range of responsibilities related to the sale of newspapers, falling under Business Auxiliary Services. The Tribunal observed that the Department's lack of clarity in the show cause notice and inconsistent classifications favored the assessee's argument. Issue 4: Applicability of Business Auxiliary Services The Department maintained that the assessee's activities, as per the agreement terms, fell under Business Auxiliary Services due to the wide range of responsibilities undertaken. However, the Tribunal found merit in the assessee's argument that the show cause notice lacked specificity, and the Department's varied classifications indicated uncertainty. Consequently, the Tribunal dismissed the appeals filed by the Revenue and allowed the appeals filed by the assessee, granting consequential relief. In conclusion, the Tribunal's decision favored the assessee due to the Department's lack of clarity in the show cause notice and inconsistent classifications, leading to the dismissal of the Revenue's appeals and the allowance of the assessee's appeals.
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