2019 (2) TMI 410 - AT - Service Tax

Classification of services - Business Auxiliary services or not - services of marketing rendered to one M/s e-Biz.Com (P) Limited, Noida - scope of Commercial Concern - case of appellant is that the appellant being an individual is not covered under the definition of taxable service for Business Auxiliary Service - Held that - Being an individual and carrying out an activity for client through computer online interface, it would be difficult to presume that such activity would attract service tax - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Demand of service tax under the category of "Business Auxiliary Service" for marketing services rendered.

Analysis:
The appeal was against Order-in-Appeal No. 32/2008 regarding the demand of service tax for marketing services provided. The appellant did not appear, but the issue was considered due to its narrow scope. The dispute revolved around whether the appellant, as an individual, fell under the definition of taxable service for Business Auxiliary Service, specifically in the context of marketing software for a company. The Revenue argued that the appellant, by receiving consideration for marketing activities, was liable for service tax under Business Auxiliary Service, while the appellant contended that being an individual, they were not covered under the term "Commercial Concern."

The first appellate authority had previously ruled on the matter, stating that the appellant's actions of enlisting more customers constituted promotion or marketing for the company. The authority rejected the argument that the activity involved education through CDs and was thus exempt under a specific notification, emphasizing that the appellant was creating new clientele and promoting the principal company's business. The advocate for the appellant cited precedents and argued that prior to a certain date, the demand was not applicable, and the invocation of a longer period was barred by limitation due to lack of evidence of malicious intent. The authority agreed with the advocate's position, noting that the appellant's activity did not relate to education and that the demand was hit by limitation. The penalties were also set aside based on the declared income in the profit & loss account.

The Tribunal found no grounds for interference in the detailed order of the first appellate authority and rejected the appeal. The judgment was dictated and pronounced on a specific date in 2019.