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2019 (1) TMI 379 - AT - Service TaxBusiness Auxiliary service - Liability of Service Tax - service of Commission Agent to Indian Service Recipient i.e. Amway Enterprise in USA - appellant is a Non-Resident Indian - who is liable to pay tax, appellant or service recipient? - Held that - An individual or a proprietor or a proprietorship concern cannot be charged service tax under BAS - There is no dispute that the appellant is an individual NRI in USA. During the relevant period this Tribunal has given various judgments wherein it was held that an individual and / or proprietorship concern is not considered as a commcerial concern, therefore, the service tax under BAS is not payable by such individual - reliance placed in the case of PRATAP SINGH JYALA VERSUS COMMISSIONER OF CENTRAL EXCISE 2015 (12) TMI 819 - CESTAT NEW DELHI - appeal allowed - decided in favor of appellant.
Issues:
1. Liability of NRI agent for service tax. 2. Sustainability of service tax demand under BAS. 3. Classification of appellant as a commercial concern. 4. Eligibility of appellant for SSI exemption. 5. Invoking extended period for interpretation difference. 6. Imposition of penalty. Issue 1 - Liability of NRI agent for service tax: The case involved a Non-Resident Indian (NRI) providing services as a Commission Agent to an Indian Service Recipient. The question was whether the NRI agent or the recipient of the service was liable for the service tax. The appellant argued that as an NRI, he was not liable for service tax as the service tax liability rested with the Indian Service Recipient. The Tribunal referred to previous judgments and held that an individual NRI providing services is not considered a commercial concern, therefore not liable for service tax under BAS. Issue 2 - Sustainability of service tax demand under BAS: The appellant contended that as an individual proprietorship concern, he was not a commercial concern and thus not liable to pay service tax. The Tribunal referred to previous cases and observed that individual or proprietorship concerns are not considered commercial concerns, thereby setting aside the service tax demand under BAS. Issue 3 - Classification of appellant as a commercial concern: The appellant claimed exemption from service tax under Notification No. 14/2004-ST dated 10.09.2004 as a proprietorship concern. The Tribunal analyzed the definition of a commercial concern and held that prior to 1-5-2006, services provided by an individual were not to be treated as services provided by a commercial concern. The Tribunal set aside the demand for service tax for the relevant period based on this interpretation. Issue 4 - Eligibility for SSI exemption: The appellant argued that he was eligible for the Small Scale Industry (SSI) exemption under Notification No. 5/2005. The Tribunal did not address this issue specifically as the appeal was allowed on other grounds related to service tax liability. Issue 5 - Invoking extended period for interpretation difference: The appellant raised concerns regarding the invoking of the extended period for tax assessment due to interpretation differences and classification disputes. The Tribunal, based on previous judgments, held that an individual or proprietorship concern cannot be charged service tax under BAS, thereby setting aside the extended period invocation. Issue 6 - Imposition of penalty: The Tribunal did not address the issue of penalty imposition specifically as the appeal was allowed on the grounds related to service tax liability. The appellant's appeal was allowed, and the impugned order was set aside, providing consequential relief. In conclusion, the Tribunal ruled in favor of the appellant, an NRI providing services as a Commission Agent, by setting aside the service tax demand under BAS and holding that individual or proprietorship concerns are not liable for service tax under BAS. The judgment emphasized the distinction between commercial concerns and individual service providers, providing relief to the appellant based on established legal principles and precedents.
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