2023 (4) TMI 1198 - AT - Service Tax

Taxability - business auxiliary service (bas) - amount received by the appellant from the customers who purchased vehicle for assisting the registration of the vehicles with the Regional Transport Office tax - period prior as well as to 01.07.2012 Period prior to 01.07.2012 - HELD THAT - The issue for the period prior to 01.07.2012 is covered by the decision of the Tribunal in Arpanna Automotives 2016 (3) TMI 308 - CESTAT MUMBAI where it was held that In our considered view helping the purchaser with registration with the RTO, cannot be considered by Business Auxiliary Service, in view of the foregoing, we hold the Service Tax demand of the amount retained by the appellant in respect of RTO registration fees is not sustainable. The impugned order is set aside - thus, the Commissioner was not justified in confirming the demand of service tax under BAS for the period prior to 01.07.2012. Period post 01.07.2012 - HELD THAT - The issue was decided in favour of the appellant by the Commissioner (Appeals) in the order dated 19.12.2018 where it was held that Further, for an activity to be considered a declared service as defined in clause (e) of the Section 66E of the Finance Act, 1994, the two parties must agree for the act or for refraining from an act, for a consideration. In the case of the appellant, though certain amounts, as mentioned above, were billed/ received, there was no such agreement for an act or refraining from an act between the appellant and any other person and no consideration was agreed upon. In view of the above, the amounts received/billed by the appellant neither constituted a consideration for providing a Business Auxiliary Service or Business Support Service prior to 1.7.2012 nor did the same fall within the ambit of a declared service with effect from 1.7.2012 - It would be seen from the aforesaid order passed by the Commissioner (Appeals) that even for the period post 01.07.2012 the activity could not have been considered as a declared service and, therefore, the demand could not have been confirmed. Even otherwise, the second and the third show cause notices do not propose to demand service tax under section 65B(44) of the Finance Act and merely refer to the first show cause notice which, as noticed above, proposed demand of service tax under BAS. Apart from the fact that the demand could not have been confirmed under section 65B(44) of the Finance Act for the reason that the activity cannot be considered as a declared service under section 66E(e) of the Finance Act, a demand cannot also be confirmed on an allegation other than an allegation contained in the show cause notice. Thus, the Commissioner was not justified in confirming the demand for the period post 01.07.2012. Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the quashing of an order passed by the Commissioner, Customs, Central Excise, and Service Tax, Commissionerate Dehradun regarding the taxability of amounts received by the appellant from customers for assisting in vehicle registration under 'business auxiliary service' (BAS).

Issue 1 - Taxability under BAS for the period prior to 01.07.2012:
The appellant, an authorized Maruti Car Agency, was engaged in assisting customers with vehicle registration services. The Commissioner confirmed the demand under BAS for the period prior to 01.07.2012. However, the Tribunal held that the appellant's activity of assisting customers with registration did not fall under BAS as it did not constitute a declared service. The demand for service tax under BAS for this period was set aside based on precedents and legal provisions.

Issue 2 - Taxability under BAS for the period post 01.07.2012:
For the period post 01.07.2012, the Commissioner confirmed the demand under BAS. However, the Commissioner (Appeals) held that the appellant's activity did not amount to a declared service as defined in the Finance Act. The Commissioner (Appeals) concluded that the demand for service tax for this period was not sustainable as there was no agreement for an act or refraining from an act between the appellant and the customers. The Tribunal upheld this decision, stating that the demand could not be confirmed for the period post 01.07.2012.

Conclusion:
The Tribunal set aside the Commissioner's order confirming the demand under BAS for both the periods, prior to and post 01.07.2012. The Tribunal found that the appellant's activity of assisting customers with vehicle registration did not constitute a declared service under the Finance Act. The demand for service tax was deemed not sustainable, and the appeal was allowed.