2014 (6) TMI 524 - AT - Service Tax

Business Support Services - Transportation of parcels, goods and operation of courier services in the buses of the appellant - Held that - services provided by the appellant would come under the category of business support services only from 1.5.2011 when the words operational or administrative assistance in any manner were included in the definition of business support services . It is his submission that services provided by the appellant would clearly come under this category and after 1.4.2011, the appellant is paying service tax under this category. - In view of the clarification issued by the Board while considering the nature of services provided by the appellant, we consider, prima facie, the appellant has been able to make out a case to show that the services provided by them would come under the category of operational or administrative assistance and therefore, there may not be any liability prior to 1.5.2011. Accordingly, the requirement of pre-deposit of the adjudged dues is waived and stay against recovery of the same is granted during pendency of the appeal - Stay granted.

Summary

Issues:
1. Liability to pay service tax on space provided for transportation services.
2. Classification of service under 'Business Support Services'.
3. Interpretation of 'Infrastructural Support Services'.
4. Applicability of Board's Circular on categorization of services.
5. Liability period for service tax payment.

Analysis:
The judgment addresses the issue of liability for service tax on the space provided by the appellant to a transport and courier service. The demand was based on the appellant's space provision for transportation services, leading to a penalty under Sections 77 & 78 of the Finance Act, 1994. The service was classified as 'Business Support Services', specifically 'Infrastructural Support Services'. The definition of 'infrastructural support services' was crucial in determining the nature of the appellant's service provision.

The Tribunal considered the definition of 'Business Support Services' and noted that 'infrastructural support services' encompass various elements like office utilities, reception services, secretarial support, and security. The appellant's service provision was analyzed in light of this definition. The appellant relied on a Board's Circular dated 28.2.2011 to argue that their services fell under 'business support services' only after specific amendments were made to the definition. The Circular highlighted the inclusion of 'operational or administrative assistance' in the category post a certain date.

The Tribunal, after considering the appellant's arguments and the Board's Circular, found merit in the appellant's case. It was observed that the services provided could be categorized as 'operational or administrative assistance' falling under 'business support services' post the specified date. Consequently, the requirement for pre-deposit of dues was waived, and a stay against recovery was granted during the appeal's pendency. This decision was based on the interpretation of the service nature and the applicability of the Circular in determining the liability period for service tax payment.

In conclusion, the judgment meticulously analyzed the service classification, interpretation of relevant terms, and the impact of the Board's Circular on the liability period for service tax payment. The decision provided clarity on the categorization of services and the timeline for service tax liability, offering relief to the appellant during the appeal process.