2019 (1) TMI 564 - AT - Service Tax

Classification of services - Business Auxiliary Service or not - activity of providing service of overseas sale of sea foods for Indian exporters - Held that - In the present case, though the appellant had claimed that they were appointed by the overseas buyers for procurement/purchase of sea foods for and on behalf of the overseas buyers, however, statements of the local exporters reveal that for sale of their sea food products to overseas buyers, they have paid the appellant commission in Indian rupees - the appellant had rendered services to the local exporters in the sale of the sea foods and received commission from them. Extended period of limitation - penalty - Held that - Since the appellant had not registered themselves with the central excise and service tax department for payment of appropriate service tax on the commission amount received from the Indian exporters and not disclosed the said facts, hence the authorities below have rightly confirmed the demand with interest invoking extended period of limitation - consequently imposition of penalties also justified. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Whether the services rendered by the appellant fall under the category of Business Auxiliary Service.

Analysis:
The appeal was filed against an Order-in-Appeal passed by the Commissioner of Central Excise & Service Tax (Appeals -IV), Mumbai-I. The case involved the appellant providing services related to the overseas sale of sea foods for Indian exporters. A show-cause notice was issued, alleging that the commission paid by Indian exporters for the sale of products to overseas customers falls under Business Auxiliary Service, with a proposed recovery of Service Tax. The demand was confirmed with interest and penalty, leading to the appeal. The appellant contended that the services provided were export services and not subject to Service Tax. The appellant argued that the commission received from Indian exporters should not be considered as not providing service to overseas customers. The appellant cited various judgments to support their case.

The main issue in this case was whether the services rendered by the appellant fell under the category of Business Auxiliary Service as defined under Section 65(19) of the Finance Act, 1994. The definition includes services related to promotion, marketing, sale of goods, customer care service, procurement of goods or services, production or processing of goods, provision of service on behalf of the client, and services incidental or auxiliary to specified activities. The Tribunal analyzed the evidence, including statements from local exporters confirming payment of commission to the appellant for selling sea foods to overseas buyers. The Tribunal noted that the appellant had not registered for Service Tax on the commission received from Indian exporters, leading to the confirmation of the demand with interest and penalties.

The Tribunal found that the appellant had indeed provided services to local exporters for the sale of sea foods and received commission from them. The Tribunal rejected the appellant's argument that they were appointed by overseas buyers, as evidence showed payments made by Indian exporters. The Tribunal upheld the decision of the lower authorities, stating that the demand was justified, and penalties were rightly imposed due to non-disclosure and non-registration for Service Tax. The case laws cited by the appellant were deemed inapplicable to the present case based on the specific circumstances and evidence presented. Ultimately, the Tribunal dismissed the appeal, upholding the impugned order.