2018 (1) TMI 1216 - AT - Service Tax

Business Auxiliary Services - documents processing charges received by the appellant from the buyer of vehicle - Held that - Since, for providing documentation service, the appellant claims the charges from its customers, the same should not be considered as business auxiliary service, in as much as, there is no involvement of any third party, on whose behalf, the appellant provides service to its customers - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Service Tax demand on document processing charges under business auxiliary service.

Analysis:
The appellant, engaged in trading activities and providing taxable services, faced a Service Tax demand on document processing charges received from vehicle buyers. The Department categorized these charges as business auxiliary service. The appellant argued that it provides document processing services for customers seeking vehicle funding without involvement of financial institutions, making the relationship purely commercial. The appellant contended that since there is no contractual agreement with banks/financial institutions for remuneration, the charges from customers should not be considered business auxiliary service. The Revenue, represented by the Ld. DR, supported the findings in the impugned order.

Upon hearing both parties, the Tribunal observed that the appellant does not provide services on behalf of financial institutions or banks, and there is no contractual agreement with such entities for remuneration. As the appellant charges customers directly for documentation services without involving third parties, the Tribunal concluded that the services do not fall under business auxiliary service. Consequently, the Service Tax demand against the appellant was deemed unjustified, and the impugned order was set aside, allowing the appeal in favor of the appellant. The judgment was dictated and pronounced in open court by the Tribunal.