2023 (8) TMI 319 - AT - Service Tax

Classification of services - auctioneer s service or not - conducting auction of various commodities for which they receive consideration in the form of commission / service charges - demand of Service Tax under GTA service - levy of penalties u/s 76, 77(1)(a) and 77(2) of the Finance Act, 1994. HELD THAT - This very Bench in the appellant s own case for an earlier period has, in its Final Order 2021 (3) TMI 218 - CESTAT CHENNAI , set aside the demands insofar as auctioneer s service and business support service are concerned, but however, has sustained the demand under GTA service for the normal period, if any - since the Revenue did not place any deviating circumstances on record, following the above order the impugned order is set aside insofar as auctioneer s service is concerned. But however, the demand of Service Tax, if any, in respect of GTA service, is sustained for the normal period alone. Penalties - appellant seeks waiver of penalties imposed on them on the ground that the issue being one of interpretation of law, the non-payment of Service Tax was under a bona fide belief, thus arguing that there was no suppression or intention to evade duty on their part - HELD THAT - It is deemed fit to set aside the imposition of penalty under Section 76 of the Finance Act, 1994. However, the proportionate penalties insofar as GTA service alone is concerned, imposed under Section 77(1)(a) and 77(2) ibid., for non-obtaining Service Tax Registration as stipulated under Section 69 and for non-furnishing of statutory ST-3 returns as required under Section 70 respectively, are sustained. Appeal allowed in part.

Issues involved:
The issues involved in the judgment are:
1. Whether the demand of Service Tax under 'auctioneer's service' is correct?
2. Whether the demand of Service Tax under 'GTA service' is sustainable?
3. Whether the consequential penalties imposed under Sections 76, 77(1)(a), and 77(2) of the Finance Act, 1994 are justified?

Issue 1: Auctioneer's Service
The Revenue doubted that the services provided by the appellant, a co-operative society conducting auctions, fell under 'auctioneer's service' as defined under the Finance Act, 1994. Despite the appellant's detailed reply denying tax liability, the Assistant Commissioner confirmed the demand for Service Tax under auctioneer's service, along with interest and penalties, in the Order-in-Original.

Issue 2: GTA Service
The Revenue observed that the appellant did not pay Service Tax towards Goods Transport Agency (GTA) service, despite engaging in the movement of ration goods and paying freight. The Assistant Commissioner upheld the demand for Service Tax under GTA service in the Order-in-Original.

Issue 3: Penalties
The appellant contested the penalties imposed, arguing that the non-payment of Service Tax was due to a bona fide belief and not an intention to evade duty. Following a previous order by the same Bench, the penalties under Section 76 of the Finance Act, 1994 were set aside. However, the penalties under Sections 77(1)(a) and 77(2) for GTA service were upheld for non-compliance with registration and filing requirements.

The Tribunal referred to a previous order in the appellant's case, where demands under auctioneer's service and business support service were set aside, but the demand under GTA service was sustained for the normal period. Based on this precedent and the lack of new evidence from the Revenue, the impugned order regarding auctioneer's service was set aside. However, the demand for Service Tax under GTA service for the normal period was upheld.

The Tribunal considered the appellant's plea to waive penalties, noting that the issue was one of interpretation of law and not intentional evasion. Following the previous order, the penalty under Section 76 was set aside, but penalties under Sections 77(1)(a) and 77(2) for GTA service were upheld due to non-compliance with registration and filing obligations.

In conclusion, the appeal was disposed of with the demand under auctioneer's service set aside, while the demand for GTA service for the normal period was sustained. Penalties under Section 76 were waived, but penalties under Sections 77(1)(a) and 77(2) for GTA service were upheld.

*(Order pronounced in the open court on 04.08.2023)*

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