Service tax exemption under Notification No. 6/2005-S.T. was denied prima facie where brand-name promotion fell within the exclusion.

Entitlement to exemption under Notification No. 6/2005-S.T. was examined in the context of a service tax demand under Business Auxiliary Services. The applicants argued that their commission for the relevant financial year was below the prescribed limit, but the Revenue contended that they were promoting sales using the Blue Mount brand name, which was excluded from the notification. On a prima facie reading, the exemption was found unavailable at this stage, and the applicants were directed to deposit 50% of the service tax demand within the stipulated time, with recovery of the balance demand and penalty stayed on compliance.

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Issues: Whether the applicants were entitled to the benefit of Notification No. 6/2005-S.T. dated 01.03.2005 so as to avoid pre-deposit of the service tax demand confirmed under the category of Business Auxiliary Services.

Analysis: The applicants claimed exemption on the basis that the commission received in the relevant financial year was below the prescribed limit. The Revenue opposed the claim on the ground that the applicants were promoting sales by using the brand name Blue Mount, which was excluded from the notification. On a prima facie consideration, the notification was construed against the applicants and the benefit of exemption was found unavailable at this stage.

Conclusion: The applicants were held not entitled, prima facie, to the benefit of the notification, and were directed to deposit 50% of the service tax demand within the stipulated time, with stay of recovery of the balance demand and penalty on compliance.

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