2007 (7) TMI 194 - AT - Service Tax

Services to cable operator on behalf of client Not. 25/04 exempt Business Auxiliary Service for period prior to 10-9-04 exemption claimed before comm.(A) under clause (c) assessee has abandoned the above claim & has claimed the benefit of clause (d)(iii) in this appeal - held that the assessee, who had not claimed exemption initially, was not prohibited from claiming such benefit at later stage claim needs to be examined by original authority allow this appeal by way of remand

Summary

Issues:
Demand of Service Tax on Business Auxiliary Service for a specific period; Claim for exemption under Notification No. 25/2004-S.T.; Applicability of clause (d)(iii) of the Notification; Jurisdiction of the Tribunal to examine belated claims; Precedents cited for supporting the belated claim.

Analysis:

The appeal before the Appellate Tribunal CESTAT, CHENNAI pertains to the demand of Service Tax amounting to Rs. 1,73,037/- on Business Auxiliary Service provided during a particular period. The appellants were engaged in providing "ESS services" to cable operators under an agreement with a company. The lower authorities classified these services as Business Auxiliary Service under Section 65 of the Finance Act, 1994, leading to the tax demand based on consideration collected from customers. Initially, the assessee did not claim any exemption from tax payment but later sought exemption under clause (c) of Notification No. 25/2004-S.T., dated 10-9-2004 before the first appellate authority, which was rejected. In the current appeal, the assessee abandoned the previous claim and invoked the benefit of clause (d)(iii) of the Notification.

The Tribunal, after considering the submissions and case laws cited by the counsel, observed that the assessee's claim for exemption under clause (d)(iii) of the Notification warrants examination by the original authority in adherence to the law. The Tribunal referred to the judgment in National Thermal Power Co. Ltd. v. Commissioner of Income-Tax [1998 (99) E.L.T. 200 (S.C.)], emphasizing the Tribunal's jurisdiction to address legal questions not raised earlier. Additionally, reliance was placed on the judgment in Share Medical Care v. Union of India [2007 (209) E.L.T. 321 (S.C.)], highlighting that an assessee could claim exemption later even if not initially asserted, without being barred or estopped. Consequently, the Tribunal allowed the appeal by remanding the matter to the original authority for reevaluation of the assessee's claim under clause (d)(iii) of the Notification, ensuring a fair opportunity for the assessee to present their case.

In conclusion, the Tribunal's decision to remand the case for reexamination of the exemption claim under the relevant Notification showcases a balanced approach, considering legal precedents and ensuring procedural fairness for the assessee. The judgment underscores the importance of due process and the right of the assessee to assert exemptions even at later stages, in line with established legal principles and precedents cited during the proceedings.