2019 (1) TMI 321 - AT - Service Tax

Demand of service tax - support services - management, maintenance or repair services - Held that - The demand on both the services do not sustain - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Service tax demand on the respondent/assessee for promotion and sale of electronics and measurement equipment.
2. Applicability of earlier Tribunal decision on similar grounds.
3. Dismissal of the appeal by the department.

Analysis:

Issue 1: Service tax demand on the respondent/assessee
The respondent/assessee were involved in promoting and selling electronics and measurement equipment manufactured by M/s Agilent Group in Singapore. They were appointed as sales representatives to identify potential customers, understand their requirements, and provide support services in India. Additionally, they offered management, maintenance, or repair services to customers who purchased goods from M/s Agilent, Singapore. The Department issued two show cause notices demanding service tax, which were adjudicated by the Commissioner who dropped the demand and penal provisions. The Department appealed against this decision.

Issue 2: Applicability of earlier Tribunal decision
The Tribunal referred to a previous decision in the respondent's own case where a similar demand for service tax had been decided. The earlier decision highlighted that the tax demand related to Business Auxiliary Service (BAS) was considered as export of service and not leviable. It also mentioned that the demand for Management, Maintenance, or Repair Service was unsustainable based on legal precedents. Given the similarity in facts, the Tribunal found that the previous decision was applicable in the present case and held that there was no merit in the appeal filed by the Department.

Issue 3: Dismissal of the appeal
Based on the above analysis and the precedent set by the earlier Tribunal decision, the current appeal filed by the Department was dismissed. The Tribunal concluded that the respondent/assessee were entitled to succeed, and the impugned order demanding service tax was quashed. The decision was pronounced in the open court, and the appeal was dismissed accordingly.

In summary, the Tribunal upheld the earlier decision regarding the service tax demand on the respondent/assessee, ruling in favor of the respondent based on legal precedents and settled legal positions. The appeal filed by the Department was dismissed, and the demand for service tax was quashed.