Business auxiliary service

CESTAT, BANGALORE BENCH

Bhuvaneswari Agencies (P.) Ltd.

v.

Commissioner of Central Excise

Service Tax - II Division

Dr. S.L. Peeran, Judicial Member

Final Order No. 829/2007

in Appeal No. ST/328/2006

July 27, 2007

Section 65 of the Finance Act, 1994 - Business auxiliary service - Whether activity of rendering services of arranging shipment of export cargo and negotiating same with shipping lines on behalf of clients would fall under definition of Business auxiliary services - Held, no [Para 4]

FACTS

The revenue demanded service tax from the assessee under the category ‘Business auxiliary service’ on the ground that it was rendering services of arranging shipment of the export cargo and negotiating the same with shipping lines on behalf of its clients. On appeal, the assessee contended that the activity carried out by it would come within the category specified under ‘Steamer agent’ with effect from 15-6-1997 and, therefore, in terms of the definition of ‘Business auxiliary services’ read with the definition of ‘Steamer agent’, service tax could not be levied upon it under the category of ‘Business auxiliary services’. On appeal, the Commissioner (Appeals) confirmed the demand and imposed penalty.

On appeal:

HELD

In view of the definition of the ‘Business auxiliary services’ the activities carried out by the assessee did not fall within the first category of ‘Promotion or marketing or sale of goods, etc.’ and so also under the category (iii), i.e., any customer care service provided on behalf of the client. It was found that more specific category for coverage would be under the ‘Steamer agent’ service which clearly refers to the type of activities carried out by the assessee under section 65(100)(ii), i.e., ‘to book, advertise or canvass for cargo for or on behalf of a shipping line’. The promotion or marketing of service provided by the client to category (ii) of ‘Business auxiliary services’ under section 65(19) has to be read along with category (i) and (iii) of the definition of ‘Business auxiliary services’. It cannot be broad enough to bring in a specified activity which has been delineated under steamer agent under the definition of ‘Steamer agent’ under section 65(100) which specifically covers in its item 2, i.e., ‘to book, advertise or canvas for cargo for or on behalf of a shipping line’. In view of the category already mentioned under Steamer agent, the plea of the assessee that it was not covered under the ‘Business auxiliary services’ was required to be upheld. There was no merit in the impugned order and the same was to be set aside by allowing the appeal. [Para 4]