Business auxiliary service for promoting educational CDs: service tax liability rested with the principal, and the demand failed.

Promotional activity undertaken for the sale of educational CDs was treated as a business auxiliary service rendered on behalf of the principal, because the materials were supplied by eBIZ and the appellants only promoted their sale. On that basis, the service tax, if any, was held payable by the principal, not by the appellants. The exemption under Notification No. 14/2004-S.T. dated 10.09.2004 was considered applicable to the nature of service involved, and the demand against the appellants was not sustainable.

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Issues: Whether the appellants were liable to service tax on promotional activity for sale of educational CDs, or whether the tax, if any, was payable by the principal and the benefit of Notification No. 14/2004-S.T. dated 10.09.2004 was available.

Analysis: The record showed that the educational materials were supplied by eBIZ, and the appellants were only promoting their sale. On that basis, the activity was treated as a business auxiliary service rendered on behalf of the principal. The exemption notification cited by the appellants was considered applicable to the nature of service involved, and the demand could not be sustained against them.

Conclusion: The service tax demand against the appellants was not sustainable and the tax, if any, was payable by the principal, not the appellants.

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