2019 (10) TMI 891 - AT - Service Tax

Classification of services - Business Auxiliary Service or Travel Agent Service - time limitation - HELD THAT - This issue is no more res integra and has been settled by the Tribunal and by the Hon ble High of Kerala in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS SHABEER TRAVELS 2010 (3) TMI 818 - KERALA HIGH COURT wherein the Hon ble High Court of Kerala has held that services can not be charged under business auxiliary services - the demand of service tax under Business Auxiliary Service is not sustainable in law, therefore set aside. Time limitation - HELD THAT - The entire demand is also barred by limitation as the Department has wrongly invoked the longer period by alleging suppression whereas the issue involves pure interpretation and in such circumstances, invoking extended period of limitation is not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Appeal against demand under 'Business Auxiliary Service' confirmed by Commissioner of Service Tax, Bangalore for two periods - April 2007 to March 2008 and April 2004 to March 2005. Appellant contests demand under 'Business Auxiliary Services' only.

Detailed Analysis:

Issue 1: Demand under 'Business Auxiliary Service'
- Facts: Appellants operated buses and booked bus tickets for other transport operators for a commission. Commissioner demanded service tax under 'Business Auxiliary Service' for the periods in question.
- Appellant's Argument: Impugned order not sustainable as it did not appreciate the definition of 'Business Auxiliary Service' properly. Appellant cited precedents where similar issues were decided in favor of the assessee.
- Department's Response: Reiterated findings of the impugned order.
- Decision: Tribunal found the issue settled in favor of the assessee by the High Court of Kerala in a similar case. High Court held that the appellant was engaged in travel agency business, not 'Business Auxiliary Service.' Tribunal set aside the demand under 'Business Auxiliary Service' as unsustainable in law.

Issue 2: Limitation for Demand
- Appellant's Argument: Entire demand for the second period was barred by limitation as the show-cause notice was issued after a significant delay.
- Decision: Tribunal agreed with the appellant, citing precedents where demands based on pure interpretation were not sustainable under extended periods of limitation. Quoted decisions supported setting aside the demand due to the delay in issuing the notice.

Conclusion:
The Tribunal set aside the demand under 'Business Auxiliary Service' for both periods and also held the demand for the second period as barred by limitation. The decision was based on settled legal principles and precedents, providing consequential relief to the appellant.