2016 (5) TMI 747 - AT - Service Tax

Waiver of pre-deposit in full and stay of further proceedings for realisation of liability assessed - Business Auxiliary Service - Appellant acting as an intermediary to facilitate citizens to obtain various licences, permissions and registrations which are statutorily regulated and collected a stipulated fee in return from individuals and organisations who apply for such licences/permission or registrations. Held that - the services provided by the appellant to public for facilitating receipt by them of licenses/permissions/registrations issued by the State Govt. do not fall within the ambit of any integer of Business Auxiliary Service as defined in Section 65(19), including within the ambit of service provided as a commission agent, since the public from whom the appellant had received consideration cannot be said to be providing any service to the State while receiving the statutorily mandated permissions/licences/registrations. Therefore, waiver of pre-deposit in full is granted and all the further proceedings for recovery of the assessed liability under the impugned order are stayed. - Waiver granted in full

Summary

Issues:
1. Waiver of pre-deposit in full.
2. Stay of further proceedings for realization of the liability assessed by the impugned order.

Analysis:
1. The appellant sought a waiver of pre-deposit in full and a stay of further proceedings for the liability assessed by the Commissioner of Customs (Appeals). The proceedings were initiated against the appellant for recovery of service tax, interest, and penalties based on the premise that the appellant provided Business Auxiliary Service from March 2005 to March 2009 by facilitating obtaining licenses and permissions from the government. The appellant operates a suwidha center in Ludhiana authorized by the Government of Punjab to act as an intermediary to help citizens obtain various licenses and permissions. The appellant collects a fee from individuals and organizations for processing and forwarding their applications to the State Government for issuance of licenses, permissions, or registrations.

2. The revenue considered the services provided by the appellant as taxable under Business Auxiliary Service, with the consideration received being the taxable value. However, upon examining the definition of Business Auxiliary Service in Section 65(19) of the Finance Act, 1994, the Tribunal found that the services provided by the appellant do not fall within the ambit of Business Auxiliary Service. The Tribunal noted that the services rendered by the appellant to the public for facilitating the receipt of licenses/permissions/registrations from the State Government do not fit any category of Business Auxiliary Service defined in Section 65(19). The Tribunal highlighted that the public receiving the permissions/licenses cannot be considered as providing any service to the State, thus ruling in favor of the appellant.

3. Consequently, the Tribunal concluded that the appellant had a strong case for the waiver of pre-deposit. Therefore, the Tribunal granted a full waiver of pre-deposit and stayed all further proceedings for the recovery of the assessed liability under the impugned order until the appeal is disposed of. The stay application and miscellaneous application were disposed of accordingly, providing relief to the appellant in this matter.