Tribunal upholds Order-in-Appeal on service tax for money delivery activities

The Tribunal upheld the Order-in-Appeal, dismissing the Revenue's appeal. It concluded that the respondent's activities, acting as sub-agents delivering money to beneficiaries, were not liable to service tax as they constituted an export of service, following precedent set in a previous case. The Revenue's argument that the activities fell under "Business Auxiliary Service" was rejected, emphasizing that the activities did not go beyond delivering money to beneficiaries as directed by their principal representative.

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Issues:
1. Whether the activities of the respondent fall under the category of "Business Auxiliary Service" for service tax liability under Section 65(19) of the Finance Act, 1994.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner (Appeals), Central Excise, Chandigarh. The case involved M/s. Ashu Forex Pvt. Ltd., acting as a sub-agent of M/s. AFL Mumbai, who were the principal representative of Western Union Money Transfer Services, Ireland. The Revenue contended that the activities of the respondent, involving paying money to designated recipients and assisting in transferring Foreign Exchange, constituted "Business Auxiliary Service" liable for service tax. The Show Cause Notice issued to the respondent demanded service tax, interest, and penalties under various sections of the Finance Act. The Order-in-Original confirmed the tax amount, interest, and imposed penalties, which was challenged by the respondents before the Commissioner (Appeals) who allowed the appeal, leading to the Revenue's challenge in the present appeal.

The Revenue argued that the Commissioner (Appeals) erred in holding that the respondent's activities did not fall under "Business Auxiliary Service." According to the Revenue, the respondent's activities went beyond delivering money to beneficiaries and included advertising and promoting the money transfer service, which should be considered as falling under "Business Auxiliary Service." The Revenue contended that the Commissioner (Appeals) failed to appreciate the respondent's activities properly and sought to set aside the impugned order.

In the absence of representation from the respondent, the Tribunal examined the nature of the respondent's activities. The respondents acted as sub-agents of M/s. AFL Ltd., Mumbai, delivering money to beneficiaries in India as directed by their principal representative, for which they received commissions. The central issue was whether these activities were liable to service tax under Section 65(19) of the Finance Act, 1994.

The Tribunal referred to a previous decision in the case of Paul Merchants Ltd., where it was held that advertisement and sale promotion by agent/sub-agent constituted an export of service and was not subject to service tax. Relying on this precedent, the Tribunal concluded that the activities undertaken by the respondents were not liable to service tax as they were considered an export of service. Consequently, the Tribunal upheld the Order-in-Appeal and dismissed the Revenue's appeal.

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