2013 (9) TMI 512 - AT - Service Tax

Business support services appellant provided services towards Sales Promotion activities Held that - Managing distribution and logistics would get covered under Business Support Services under Section 65A the definition which is more specific has to be preferred over the description of general nature for the purpose of classification of services. Goods transport agency services - Balance-sheet of the appellant described the amount received as transport/delivery charges Held that - Prima facie the demand of the department appears to be sustainable. Pre deposit of duty token amount of was ordered to be deposited remaining amount stayed till the disposal of issue stay granted partly.

Summary

Issues:
Classification of services for Service Tax liability - Business Support Service or Business Auxiliary Service
Calculation error in demand under GTA Service

Analysis:
1. Classification of services for Service Tax liability:
The appellant, engaged in transport coordination activities, contested the Service Tax demand under the category of Business Service. The appellant argued that the activity falls under "Business Support Service" introduced from 1.5.2006 and not under "Business Auxiliary Service." The Revenue, however, relied on a circular stating that managing distribution and logistics falls under Business Auxiliary Support Services. The Tribunal analyzed the definitions of both services and found that managing distribution and logistics align more with Business Support Services. The Tribunal held that the appellant's activity should be classified under Business Support Service, contrary to the Revenue's classification under Business Auxiliary Service.

2. Calculation error in demand under GTA Service:
Regarding the demand under Goods Transport Agency (GTA) Service, the appellant pointed out a computation error in the demand amount. The appellant highlighted that the figure taken from the Balance-sheet was incorrect, leading to an inflated demand. The Tribunal acknowledged the discrepancy and noted that the demand based on the Balance-sheet amount for transport/delivery charges appeared sustainable. The Tribunal directed the appellant to make a pre-deposit of Rs.2 lakhs by a specified date and report compliance. Upon compliance, the pre-deposit of the remaining dues would be waived, and recovery stayed during the appeal's pendency.

In conclusion, the Tribunal ruled in favor of the appellant regarding the classification of services for Service Tax liability, categorizing it under Business Support Service instead of Business Auxiliary Service. Additionally, the Tribunal addressed the calculation error in the demand under GTA Service and provided directions for compliance and pre-deposit.