2018 (11) TMI 92 - AT - Service Tax

Classification of services - Business Support Service or not - removal of scrap and slag generated during the manufacturing premises of the steel manufacturers i.e. RINL and JSWSL - Held that - On similar issue in the case of M/s Ferro Scrap Nigam Limited for the services rendered to Bokaro Steel Plant, a show cause notice was issued seeking to classify them as business auxiliary service which has not been upheld during the adjudication proceedings. When this failed, DGCEI sought to classify the same under business support service which was a later thought. The original authority has rightly observed that the activities undertaken by the respondent herein do not fall in the category of the services mentioned in the business support service or closely associated with them. Appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against dropping of proceedings in a show cause notice regarding service tax liability for services provided in relation to scrap recovery processing and transportation.

Analysis:
The appeal was filed by the Revenue against the dropping of proceedings in a show cause notice related to the service tax liability for services provided by the respondent in scrap recovery processing and transportation. The original authority had found that the services rendered did not fall under the category of business support services, as defined under Section 65(105)(zzzq) of the Finance Act, 1994. The show cause notice aimed to recover service tax, interest, and impose penalties. The Revenue contended that the activities performed by the respondent, such as collection, segregation, cleaning, transportation, and other operations, constituted business support services. However, the respondent argued that their activities did not align with the definition of business support services under the service tax act.

Upon reviewing the arguments and records, the Tribunal observed that the services provided by the respondent involved the removal of scrap and slag from the manufacturing premises of steel manufacturers. Reference was made to a similar case where services to a steel plant were sought to be classified as business auxiliary services, which was not upheld. The Revenue then attempted to classify the services under business support services. The Tribunal noted that the specific services covered under business support services did not align with the activities undertaken by the respondent. The original authority correctly determined that the respondent's activities did not fall within the scope of services mentioned under business support services. Therefore, the Tribunal found no fault in the original order and upheld the decision to drop the proceedings.

In conclusion, the Tribunal rejected the appeal filed by the Revenue and upheld the impugned order. The operative portion of the order was pronounced in open court at the conclusion of the hearing.