2024 (2) TMI 822 - AT - Service Tax

Levy of Service Tax - Business Auxiliary Services - it is the case of the revenue that the appellant was actively engaged in the business promotion of the main dealer and acting as a commission agent of the said main dealer - period October 2007 to March 2012 - HELD THAT - From N/N, 6/2005-Service Tax dated 01.03.2005, as amended by N/N. 08/2008-S.T. dated 01.03.2008, it is clear that a service provider has the option not to avail the exemption benefit under notification 6 abid and, clearly, once such option is exercised by the service provider in a financial year, then the same shall not to be withdrawn during the remaining part of such financial year. The take-away from the above is that during the same financial year if option to avail or not to avail the exemption is exercised, such option shall hold good throughout the financial year. That means, since each year is to be considered independently, any exercise of the above option would end with that financial year and the same cannot act as a permanent block for all the subsequent years to come-in. Moreover from the facts available on record, the revenue has nowhere disputed the claim of the appellant that the aggregate value of the taxable service for the years under dispute is less than the threshold limit prescribed under the above notifications. It has been held by the Hon ble Apex Court in COMMISSIONER OF INCOME-TAX, MADRAS VERSUS MAHALAKSHMI TEXTILE MILLS LIMITED 1967 (5) TMI 4 - SUPREME COURT by a three judge bench, that when the grant of relief to a tax payer is justified on any ground, the Tribunal would be under a duty to grant that relief. Hence, the demand raised and confirmed in the impugned order cannot survive, for which reason the same requires to be set aside. The impugned order is set aside - appeal allowed.

Summary

Issues involved:
The issue involved in the judgment is whether the demand sustained in the impugned order has any merit.

Comprehensive Details:
The appeal was filed by the taxpayer against the Order in Appeal, where the revenue claimed that the taxpayer was liable to pay service tax under Business Auxiliary Services for acting as a commission agent of the main dealer. A Show Cause Notice was issued proposing to demand service tax, which was confirmed in the Order-In-Original. The appellant contended that the demands were against the threshold limit prescribed by Notifications and the exemption for small service providers. The first Appellate authority rejected the appellant's pleas, stating that once service tax was paid and collected from customers, the exemption could not be claimed. The present appeal was filed against this order.

The main contentions were that the appellant had promoted the business of the main dealer without specifying the product being promoted and the scope of Business Auxiliary Services was not clearly identified. The relevant clause of the notification stated that once the option to avail or not avail the exemption is exercised in a financial year, it cannot be withdrawn during the remaining part of that year. The revenue did not dispute the claim that the aggregate value of taxable service was below the threshold limit prescribed by the notifications. Referring to a judgment, it was held that if relief to a taxpayer is justified on any ground, the Tribunal must grant that relief. Therefore, the demand raised and confirmed in the impugned order was deemed unsustainable, leading to the order being set aside and the appeal being allowed with consequential benefits.

The judgment was pronounced in the open court on 16.02.2024.