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TMI Blog2018 (6) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... ded on behalf of the “client” and hence will be exigible to service tax under “Business Auxiliary Service” as defined under Section 65 (19) of the Finance Act, 1994. Demand upheld - appeal dismissed - decided against appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 & 51/2011 dated 25.4.2011 (common) Final Order No. 40568 & 40569/14 dt. 27.6.2014 - CESTAT CMA 164 & 165/15 - HC Order dt. 27.2.15 with directions to decide on merits 3. When the matter came up before this Tribunal, vide Final Order Nos. 40568 & 40569/2014 dated 27.6.2014, the appeals were rejected as time-barred. The appellants filed CMA No. 164 & 165/2015 before the Hon'ble High Court of Madras. The Hon'ble Court vide order dated 27.2.2015 ordered as follows:- "11. It is trite law that limitation has to be reckoned only from the date when the actual service has been effected, subject to fulfilling the mandatory requirement of showing proof of delivery. In the case on hand, the service of notice was effected on the appellant only on 23.12.2011 and there is nothing on the record to show that it was served on 9.5.2011. Further, the order has been dispatched through speed post on9.5.2011 as is evident from the letter of the Superintendent (Appeals). However, prior to 10.5.2013, service through speed post having not been a recognized / approved mode of service, it cannot be treated as service for reckoning the period of limitation. For the sake of argument, even if the order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions reiterated - as per grounds of appeal, written submissions dated 03.06.2015 and 04.12.2017 4.2 Ld. Advocate made these submissions:- a) Assuming but not admitting even if the activities of the appellant are taxable, the same would be exempted upto 01.10.2012 as per under Sec.99 of the Finance Act, 2013. The Hon'ble High Court recognized this contention in para 4 of its order dated 20.11.2015 in WP No. 13262 of 2015 and WA No. 744 of 2015. The department did not object to this, but only countered about the delay in the High Court proceedings. b) Service tax being destination based tax, the above provisions would squarely insulate the appellant, as he cannot pass on service tax to either railways or to the passengers of railways. c) There were decisions to confirm that the department elsewhere attempted to classify the very same activity under Business Support Service and later confirmed under Business Auxiliary Service. This was not permissible under law and was rejected in decisions 2014-TIOL-2284 CESTAT- DEL &2015(38) STR 1010 (Tri. Del.) d) The issue involved is one of interpretation and therefore longer limitation cannot apply. Moreover, the agreement of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04, made by Finance Act (23 of 2004), 2004 reads as under : - "iii) for clause (19), the following clauses shall be substituted, namely;-- '(19)"business auxiliary service" means any service in relation to- (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production of goods on behalf of the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to(vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation, or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any information technology service and any activity that amounts to, "manufacture" within the meaning of clause (f) of section 2 of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided by a company to those people who buy or use its products or services". Customer Care service is also often explained as "provision of service to customers, before, during and after a purchase", as the process of looking after customers to best ensure their satisfaction with the business and its goods and services. The underlining motive to provide customer care services is the desire to maintain ongoing client relationship and loyalty. The railways provide bed rolls to the upper class passengers who undisputedly have to shell out considerable more ticket price as compared to second class passengers, to ensure their comfort, as a customer initiative. In our view, the appellant when performing its activities and providing these services of supply of bed rolls, free of charge to the upper class passengers, on behalf of Railways, they are surely providing the customer care service as desired by the Railways and on behalf of the Railways. 6.5 Ld. Advocate has sought to argue that they are not providing the service on behalf of a "client". He has contended that client is an individual, corporation etc. that employs a professional to advise or assist it in the professional line of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 6.7 Viewed in this light the Railways are indubitably the "client" of the appellant since they perform the said customer care service on behalf of the railways. In the event, the activities carried out by the appellant will definitely come within the scope of "Customer Care Services" provided on behalf of the "client" and hence will be exigible to service tax under "Business Auxiliary Service" as defined under Section 65 (19) of the Finance Act, 1994. 6.8 Ld. Advocate has also contended that even if it is considered that the services rendered by the appellants are taxable, the same would be exempted by virtue of Section 99 of the Finance Act, 2013 w.e.f. 10.05.2013 which has exempted taxable services provided by Indian Railways during the period prior to 1.10.2012. We are unable to agree with such a contention. The services in question are not those directly provided by the Railways but they have been outsourced to the appellant and provided by the latter. The activities, if provided by Railways themselves would not be brought under the category of "Customer Care Service provided on behalf of the client", that categorization will kick in only when such customer care services a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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