Electricity company billing services classified as "Support Service of Business" not Business Auxiliary Services. Appeal dismissed.

The Tribunal held that billing and accounting services provided to electricity companies were classified as "Support Service of Business or Commerce" under Section 65(104c) of the Finance Act, 1994, not Business Auxiliary Services. The High Court dismissed the appeal at the admission stage, finding no legal question for consideration. The services were deemed not liable to Service Tax for the period before 1-5-2006, as per the correct interpretation and application of the relevant provision.

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Issues:
Interpretation of "Support Service of business or commerce" under Section 65(104c) of the Finance Act, 1994 for tax liability of billing and accounting services provided to electricity companies.

Analysis:
The appeal was filed under Section 35G of the Central Excise Act, 1944 against the Customs, Excise and Service Tax Appellate Tribunal's order. The respondent-assessee provided services to electricity companies and departments, including spot billing, maintaining accounts, and software development. The appellant alleged that the respondent was providing services under Business Auxiliary Services without paying Service Tax. A show cause notice was issued, demanding Service Tax, interest, and penalties. The Commissioner confirmed the demand, leading the respondent to appeal before the CESTAT.

The Tribunal held that the billing and accounting services provided by the respondent fell under "Support Service of Business or Commerce" and not Business Auxiliary Services. The agreements with electricity companies indicated that the billing and accounting work was done for the companies, not on their behalf. The Tribunal concluded that these activities were correctly classifiable under Support Service of Business or Commerce based on the definition in Section 65(104c) of the Finance Act, 1994.

Section 65(104c) defines "Support Service of business or commerce" as services related to business or commerce, including accounting and transaction processing. The Tribunal's interpretation and application of this provision to the respondent's transactions were deemed appropriate. Since the transactions occurred before the incorporation of clause (104c) in Section 65 of the Finance Act, 1994, the Tribunal rightly held that these services were not liable to Service Tax for the period preceding 1-5-2006.

The High Court found no legal question for consideration in the appeal based on the analysis provided. Consequently, the appeal was dismissed at the admission stage.

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