2018 (8) TMI 1007 - AT - Service Tax

Classification of services - transportation of chasis of Commercial Vehicles from the factories of the Tata Motors Ltd. to their Regional sales officers for further sale - whether classified under Business Support Services or otherwise? - Held that - The services rendered by the appellants are to be classified under BSS that too only from 01.05.2006. CENVAT Credit - SHE Cess demanded in excess - Held that - The issue needs to back to the original adjudicating authority for a proper evaluation of the submissions of the appellant supported by documentary evidence. Penalties - Held that - Being in the nature of interpretation of statute and appreciation of documentary evidence, Penalties not warranted. Appeal allowed by way of remand.

Summary

Issues:
1. Classification of services rendered by the appellants under Business Auxiliary Services (BAS) or Business Support Services (BSS).
2. Liability for Service Tax on services provided by the appellants.
3. Eligibility of CENVAT Credit.
4. Penalties imposed on the appellants.

Analysis:

Issue 1: Classification of services under BAS or BSS
The appellants were engaged in transporting chassis of Commercial Vehicles from the factories to the Regional sales officers. The department alleged liability for Service Tax under BAS. The Commissioner confirmed the demand under BAS. However, the Bench in Appeal No. 228/2008 held in favor of the appellants, categorizing the services under BSS from 01.05.2006 onwards. The Tribunal reiterated this view, classifying the services under BSS only from 01.05.2006. The penalties imposed were set aside based on this classification.

Issue 2: Liability for Service Tax
A subsequent SCN alleged short payment of duty and ineligible CENVAT Credit during a specific period. The Commissioner confirmed the demand under BAS. The appellants argued that the services provided prior to May 2006 were not liable for Service Tax. They also disputed the calculation of CENVAT Credit and other amounts. The Tribunal directed a remand to reclassify the services under BSS and evaluate the appellants' claims and other issues raised.

Issue 3: Eligibility of CENVAT Credit
The appellants contended that the CENVAT Credit availability was not short as claimed by the Department. They provided evidence of payment through bank statements and sought relief based on their calculations. The Departmental Representative maintained the findings of the Order-in-Original, emphasizing the need for a reevaluation by the original adjudicating authority in case of a reclassification.

Issue 4: Penalties Imposed
The appellants requested the dropping of penalties based on the reclassification of services. The Tribunal set aside the penalties imposed in the Order-in-Original, considering the nature of the case as an interpretation of statute and evaluation of documentary evidence. The appeal was allowed by way of remand for a detailed examination of the classification and other issues raised.

In conclusion, the Tribunal classified the services provided by the appellants under BSS from 01.05.2006 onwards, set aside the penalties, and directed a reevaluation of the claims and issues raised, emphasizing the need for a proper assessment by the original adjudicating authority.