Business auxiliary service

CESTAT, NEW DELHI BENCH

Pasupati Spg. & Wvg Mills Ltd.

v.

Commissioner of Central Excise, Chandigarh

S.S.KANG, VICE PRESIDENT

DR. T.V.SAIRAM, TECHNICAL MEMBER

STAY ORDER NO. 553/2007 APPLICATION NO. ST/STAY/2092 OF 2007

IN APPEAL NO. ST/479 OF 2007

NOVEMBER 15, 2007

Section 65, read with section 86, of the Finance Act, 1994 - Business auxiliary service - Period 9-7-2004 to 31-5-2005 during relevant period assessee had received services of commission agent who was residing outside India - Service tax demand was confirmed against assessee under category of ‘Business auxiliary service’ alongwith penalty - Commissioner (Appeals) upheld demand - Assessee contended that issue of jurisdiction raised by assessee on ground that demand was confirmed against factory and commission had been paid by their factory was not considered by Commissioner (Appeals) - It was also submitted that demand was time-barred as no suppression could be alleged against it - Whether issue of jurisdiction and limitation was mixed question of law and facts which will gone into at time of hearing of appeal - Held, yes - Whether in these circumstances, it was not a fit case for total waiver of amount of service tax and as such assessee was to be directed to deposit 50 per cent of amount confirmed - Held, yes [Para 7]

FACTS

During the period 9-7-2004 to 31-5-2005. The assessee had received services of commission agent situated who was residing outside India. Service tax was demanded from the assessee under category of ‘business auxiliary service’ alongwith penalty. The Commissioner (Appeals) upheld the demand. In the instant application, the assessee submitted that the Commissioner (Appeals) had not considered contention raised with regard to jurisdiction on the ground that the demand was confirmed against the factory and commission had been paid by their head office. The assessee also submitted that demand was time barred as no suppression could be alleged against it.

HELD

There was no dispute that the applicant received the service of a commission agent who was residing outside India. The scope of the definition of Business auxiliary service also include commission agent. The issue of jurisdiction and limitation was mixed question of law and facts which will gone into at the time of hearing of appeal. In these circumstances, it was not a fit case for total waiver of amount of service tax. The assessee was to be directed to deposit 50 per cent of the amount confirmed. On deposit of the above-mentioned amount, the pre-deposit of remaining amount of service tax and penalty was to be
waived. [Para 7]