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2019 (12) TMI 1172 - AT - Service TaxDemand of service tax - Rent a Cab Service - Business Support Service - evasion of service tax - suppression of facts - extended period of limitation. Rent-a-cab operator service - HELD THAT - The demand sustainable on merits - As regard the limitation, the question answered in negation and in favour of the assessee. Business Support services - HELD THAT - Under clause (104C) the definition starts with the words Services Provided in relation to business or commerce and thereafter in the inclusion clause same names of the services are provided. Aas per the clear definition, the services primarily should have a support service in relation to business /commerce - In the present case the appellant have provided the support service of providing driver, cleaner and maintenance of buses which are owned by the company M/s. Welspun. There is no doubt or dispute that M/s welspun is an exclusive commercial organization and carrying out their manufacturing and sales activity in the factory where the appellant have provided the services, therefore, the services provided by the appellant is undoubtedly in relation to business or commerce - it is not necessary that only those support service which are identical or similar to the services under the inclusion clause will fall under business support service. The services mentioned in the definition as inclusive are some of the services apart from all the services which are provided in relation to business or commerce. The services provided by the appellant to M/s. Welspun who have used this service undisputedly in relation to their business or commerce and will fall under support services of business or commerce - the demand under business support service was rightly invoked by the revenue. Time limitation - HELD THAT - Since there was no ambiguity as regard taxability of appellant service under the head of Business Support Service, non-payment of service tax without informing to the department is clearly under suppression of fact on the part of the appellant, therefore, the demand for extended period is rightly invoked by the Adjudicating Authority and the First Appellate Authority. Penalty u/s 76 and 78 - HELD THAT - Simultaneous penalty under section 76 and 78 cannot be imposed as held by Hon ble Gujarat High Court in the case of M/S RAVAL TRADING COMPANY VERSUS COMMISSIONER OF SERVICE TAX 2016 (2) TMI 172 - GUJARAT HIGH COURT , therefore, the penalty imposed under section 76 is set aside - Other penalties and interests to the extent demand was sustained is imposable. Appeal allowed in part.
Issues:
1. Demand of service tax on Rent a Cab Service 2. Demand of service tax on Business Support Service 3. Time-barred demand 4. Interpretation of classification for services 5. Applicability of Infrastructure Support Service 6. Penalties under sections 76 and 78 Rent a Cab Service: The appeal challenged the Order in Appeal upholding the demand of service tax on Rent a Cab Service and Business Support Service. The appellant argued that the demand under Rent a Cab Operator Service was not sustainable as they provided cars/taxis to M/s. Welspun on a kilometer basis without charging service tax. The appellant contended that their activity fell under hiring of vehicles, not Rent a Cab Operator Service. The appellant also raised the issue of time-barring the demand, citing conflicting decisions and pending matters. However, the Tribunal found the demand sustainable based on a Gujarat High Court judgment and dismissed the appeal on this issue. Business Support Service: Regarding the demand of service tax under Business Support Service, the appellant's activity involved running and maintaining buses owned by M/s. Welspun. The appellant provided drivers, cleaners, and maintenance services for the buses used to transport company employees. The appellant argued that their services did not fall under Business Support Service as defined in the Finance Act, 1994. They contended that the services provided did not align with the definition of Business Support Service and cited various judgments to support their claim. However, the Tribunal ruled in favor of the revenue, stating that the services provided were in relation to business or commerce and thus fell under Business Support Service. The demand under this category was upheld by the Tribunal. Time-barred Demand: The appellant argued that the demand was time-barred due to the lack of suppression of facts with intent to evade payment of service tax. They highlighted conflicting decisions and pending matters as reasons for the demand being time-barred. However, the Tribunal did not find merit in this argument and upheld the demand based on the Gujarat High Court judgment. Interpretation of Classification for Services: The appellant contested the classification of their services under Business Support Service, Infrastructure Support Service, and Rent a Cab Operator Service. They argued that their activities did not align with the definitions provided in the Finance Act, 1994. The Tribunal, however, interpreted the definitions and found that the appellant's services fell under Business Support Service as they were provided in relation to business or commerce, leading to the demand being upheld. Applicability of Infrastructure Support Service: The appellant also claimed that their activities did not fall under Infrastructure Support Service as the infrastructure only related to administrative and office-related services. They cited relevant case law to support their argument. However, the Tribunal did not find merit in this claim and upheld the demand under Business Support Service. Penalties under Sections 76 and 78: The Tribunal ruled that simultaneous penalties under sections 76 and 78 could not be imposed, following a Gujarat High Court judgment. The penalty imposed under section 76 was set aside, while other penalties and interests were imposed to the extent the demand was sustained. The impugned order was modified accordingly, and the appeal was partly allowed. This detailed analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD covers all the issues involved comprehensively, providing insights into the arguments presented by both parties and the Tribunal's reasoning behind its decisions.
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