Appellants required to pre-deposit 20% of service tax, waiver for balance pending appeal

The tribunal directed each appellant to make a pre-deposit of 20% of the service tax demanded within a specified timeframe, while waiving the pre-deposit of the balance pending the appeal's disposal. The judgment addressed the levy of service tax, the challenge to the classification of the appellants as commission agents, and the determination of whether the service provided constituted business auxiliary service.

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Issues:
1. Levy of service tax on appellants for business auxiliary service.
2. Challenge to the order passed by the Commissioner (Appeals) regarding the classification of the appellants as commission agents.
3. Determination of whether the service provided by the appellants constitutes business auxiliary service.

Analysis:

Issue 1: Levy of service tax on appellants for business auxiliary service
The counsel vehemently opposed the levy of service tax on the appellants, arguing that they did not deal with the commodity or execute any agreement with the company in question. The appellants merely enlisted consumers and, therefore, should not be considered as providing business auxiliary service. The contention was that since the appellants did not directly deal with the commodity or enter into agreements, they should not be held liable for service tax under the category of business auxiliary service.

Issue 2: Challenge to the order passed by the Commissioner (Appeals)
The counsel also challenged the order passed by the Commissioner (Appeals) on the grounds that the appellants were incorrectly classified as commission agents. It was argued that the appellants did not fall under the specific definition of a commission agent as per section 65(19) of the Finance Act, 1994. This challenge was based on the interpretation of the legal definition of a commission agent and whether the appellants met the criteria outlined in the relevant legislation.

Issue 3: Determination of the nature of the service provided by the appellants
The revenue contended that the service provided by the appellants constituted business auxiliary service. The tribunal considered the arguments from both sides and acknowledged that the appellants did not deal with the goods directly. However, it was noted that the appellants received consideration for the service provided to boost the sales of the principal company. The tribunal found that there was a difference in judgment by the revenue, leading to a direction for each appellant to make a pre-deposit of 20% of the service tax demanded within a specified timeframe. The pre-deposit of the balance demand was waived pending the disposal of the appeal, considering the small nature of the demands and the differing interpretations of the law.

In conclusion, the judgment addressed the issues of the levy of service tax on the appellants, the challenge to the classification of the appellants as commission agents, and the determination of whether the service provided constituted business auxiliary service. The tribunal directed a pre-deposit for each appellant while awaiting the final decision on the appeal.

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