Business Auxiliary Service scope narrowed for facilitation centres issuing certificates on behalf of government

Running facilitation centres for issuing certificates on behalf of the Government of Punjab was, on a prima facie view, not treated as "providing of service on behalf of the client" for Business Auxiliary Service. The arrangement involved collection of prescribed fees for remittance to the Government, with an additional amount towards expenses and profit, but the Government was not shown to be paying consideration to the appellants. On that basis, the service was not found fit for enforcement at the pre-deposit stage, and waiver of pre-deposit with stay of recovery was granted.

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Issues: Whether the appellants' activity of running facilitation centres for issuing certificates on behalf of the Government of Punjab was, prima facie, covered under Business Auxiliary Service so as to justify pre-deposit of the demanded amount.

Analysis: The arrangement involved collection of prescribed fee for remittance to the Government and an additional amount towards expenses and profit. The service was rendered to the public, while the Government of Punjab was not paying consideration to the appellants. On this prima facie view, the activity did not fall within the expression "providing of service on behalf of the client" under Business Auxiliary Service.

Conclusion: The demand was not found fit for enforcement at the pre-deposit stage, and waiver of pre-deposit with stay of recovery was granted.

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